All Forum Posts by: Nat Love

So I'll say rehabbing is something that is primarily going to be learned through experience

Having a contractor do a walkthrough is a waste of everyone's time if 1) you don't know what you expect to pay 2) you don't know what needs to be done 3) especially prior to making an offer and being under contract

I get having a walkthrough - but you're just going to have a bunch of no-shows and aggravated people if you're just getting them to give you estimates on something you're not even under contract on. You will also build a crap reputation. You will also find that for every 20 offers you make maybe 1-2 of them stick. So this is a real waste of time. 

I do walk-throughs after I'm under contract and have made my scope of work. Why? Because I ACTUALLY need a contractor at this point. I have an INSPECTION report to go off of (that I add to my scope of work) and I've LOOKED at the house myself and have made a scope of work. See - now I have a need and know what I actually need. 

This being said...start small with cosmetics - paint/drywall is not going to kill you price wise. Also plumbing is expensive and expect about 75% of stuff to leak from any house you purchase. There WILL be leaks, I can guarantee it. HVAC full system - furnace/condenser/air handler will run about $6000-6500 for me for a 3-4 ton. Roof just go ahead abudget 10k. Appliances 1k apiece. Full flooring for a 1500-1600 ft house I budget 4000-6000 just depending on the type of flooring, removal etc. Big stuff and full replacements is easy to budget. Dumpster 400-500/wk. So if you start small and learn you'll eventually build up to bigger and bigger rehabs. And in the process you'll find who doesn't work, and who gives you the best value as well. Then use those same people every single time. 

Have you looked at your neighborhood to see what other places are renting for? What is a place renting for with as many rooms as you have? What is something renting for if you do the split? I think it always comes down to the numbers. If the numbers work then do it. If you can leverage your HELOC to be able to buy multiple then do it! You could do a HELOC and then get an FHA with the money you have from the HELOC. I like to use this to calculate https://www.calculator.net/ren...

Hey Nat!

I think the FHA would be useful if you are considering the possibility of renting out the house you currently live in to go and buy this property. You can put 3.5% down on the newest property, live in it for a year and then refi into a long term loan again as you can't hold multiple FHA loans at one time. You could also do a refinance on your current property and use additional funds to purchase many investment properties, there seemingly is a lot of options at your disposal!

Are you in Dallas or close by? If so, have you gone to any local real estate meetups?

@Nat Love common misconception, you do not need 20% for a Conventional loan. First time homebuyers can do 3% down, and repeat buyers can do 5% down.

If you need any help mapping out your long term strategy, and how to get to properties 3,4,5+ most efficiently, feel free to reach out.

Best of luck!

@Nat Love get a heloc on your current house, 100%.  Even if you don't use it, it costs you nothing (or next to nothing).  But once you move out and it becomes an investment property, then getting a heloc becomes a challenge, and even if you can get one the terms will be worse.  Then if you need it for future investing, it's already in place.

I'm confused, you said you don't want to house hack, but you want to buy a new primary and keep your current property, that's exactly the definition of house hacking...

For your next house, it depends on your future goals and the numbers.  Do you want to just buy 1 more property, or are you looking to build a portfolio of properties?

If you ever want to buy a 2-4 unit property, you will want to save your FHA loan for that. You can buy a primary 1-unit property with 5% down with a Conventional loan, so if this next property is a 1-unit, that's the way to go.

Best of luck!

HELCO right now are not a smart move because the rate is variable, and if the FED continues to increase rate you might end up not being able to make the payments or gain any traction.    I would consider the a fix rate mortgage on your current house, enough to get you 25 -30% down on your next, plus some cash to buy down the next house rate.