All Forum Posts by: Nate McCarthy

My mom lives in a nice house that she has paid off. However to save money when she had the house built, she left the basement unfinished--it is just studs, insulation, and windows/doors, plus plumbing in the foundation. There's obviously opportunity here to build this out and turn it into a basement apartment, which I think would cash flow because of course there's no mortgage. 

What I'm wondering is: is there a way to get the cash invested into this rehab back out of the property in a relatively short timeline, as if it were a BRRRR? If I had just bought this property and could force some appreciation, I could refinance and hopefully extract that equity within a year, for example--but since this house is paid off, refinancing would introduce a new mortgage payment.

What are the options here? Get a new loan only for the equity created by this rehab? Refinance the whole house as long as the rent exceeds the mortgage? Just let the money live in the house and collect rent as the only ROI?

Thanks for the insight!

As tenants, I'm wondering what kind of offer we could present to our landlord to buy the house we are renting. Why would we want to do this, why would we even think that the landlord would be open to such an idea, and what are the obstacles? Here's the situation:

1. Landlord had to move to a different state to have better access to healthcare, i.e. did not move by choice per se. This health issue ultimately led to a close family member passing and now I don't believe they have any family living in our area anymore.

2. Still has lots of belongings (including a boat) in a large shed on the property... could imply intention to move back, or a desire to not have to deal with it and possible interest in having help getting rid of all this stuff

3. Have heard from a neighbor who is still in touch with the landlord that he is talking about buying a sailboat and sailing around the world... not sure if he is serious about this or not but suggests to me a desire to move on from current lifestyle.

4. Home last sold in 2007 for somewhere around $120k, currently could sell for upwards of $400k, so it's probably paid off or has very low interest rate. Would not cash flow, if we were to become landlords and rent it out, with a conventional loan for the current home price at our current lease rate ($2k/mo)

5. Lot is very large and could probably accommodate 1-2 more entire houses, or just some ADUs, which is the appeal to us. However this would obviously require substantial work and we probably wouldn't have the funds for years.

Since I think we'd be losing money to rent it out (if we were to move) at our current rate with a conventional loan, I'm imagining maybe some kind of seller finance situation... which gets back to my question, what kind of deal could we present to our landlord that they might find appealing and gets us the chance to at least break even on rent?

I realize this may be a fantastical scenario with no feasible solution but I thought it would be an interesting exercise. I appreciate insight from landlords, or folks who have done deals like this before.

@Noah Laker, thank you so much for the reply!

As for the areas to target, my goal in getting our feet wet as real estate investors--and since we plan to be living in Sac--is to find a property we can live in while renting out one or more units to help cover our housing expenses, which we can then hold and continue to rent out when we move. So... the definition of a house hack, I guess. We're willing to live almost anywhere in the greater Sacramento area based on what we can afford, provided of course that the property is in a decent neighborhood that has a good chance of attracting responsible tenants.

As for budget, I believe we could get a conventional loan for properties up to $600k, but my strong preference is to find a distressed property (or seller!) for <$400k. In other words, I think we will probably have to be on the hunt for a very good deal or a very distressed property, and will not be investing in million-dollar multifamily properties... yet! Maybe you have some thoughts on if this is feasible.

I will absolutely put a pin in the NorCal Real Estate Mastermind meet-up. We're currently living in Idaho so attendance will be difficult in the near future but we'll have to plan a trip to Sac or make sure to attend a meeting when we move!

Hi! I'm an aspiring investor hoping to move to Sacramento with my wife this year, and we'd like to do a house hack in a multifamily residential property. This won't be our first time living in Sac but our first time doing so with a keen eye on real estate. 

I'd be interested in any insight on the Sacramento market, esp. from investors in multifamily. Lots of questions: Which neighborhoods should be avoided? Are there team members (RE agents, wholesalers, lenders, PMs, contractors, etc) you'd recommend? How have you found success finding deals in today's market? What are "typical" rental terms in Sac (e.g. does owner or tenant pay utilities, trash, water etc) for your properties? Are there REI networking groups you'd recommend? I'm seeing a lot of homes up for auction (mostly SFH but some multifamily) around town--do you have any insight into this trend (why all the foreclosures?) or any experience buying homes at auction in Sac? Are there any bedroom communities near Sac you've had success with?

Truly grateful for anything you're able to share!