All Forum Posts by: Eric Nelson

Your real estate agent will have the answer to both of these questions. 

@Joaquin Camarasa

Financially qualifying for the loan is not the issue. The lender has a problem giving me another low money down even though I have lived in my current property for 1 year and will live in the next property for 1 year. The issue is I would be taking advantage of the loan by purchasing a similar property in the same area for no real reason other than to acquire another property. 

I am currently house hacking a 4bd 2.5ba house which is going great. I purchased it with a 3% down conventional loan in March of 2019. I am about to hit my 1 year owner occupancy and want to purchase another property and repeat the process. 

My lender basically told me I need to have a reasonable incentive to qualify for another low money down loan on a primary residence such as up-sizing, moving closer to work, etc. Otherwise it could be considered "taking advantage" of the 3% down loan I received.

Will all lenders be hesitant to qualify me for a low money down loan on a primary residence, or am I just dealing with a conservative lender?

It depends what you want to do with it. Are you going to be living in the space? If so, converting to a duplex may be beneficial. A duplex could also minimize the impact of vacancies if only one unit is empty. 

If you are not living on the property, I think it really just comes down to how much rent you could get for 2 separate units with X amount of bedrooms as opposed to a larger SFH. Look at your local market and see which would yield more cash flow.

In my opinion, there is no reason to waste money converting the property into a duplex if leaving it as a SFH would cash flow the exact same or better.

I understand that appliances have a "predictable lifespan". An oven/range typically have a predictable lifespan of 20 years. 

A tenant broke my 10 year old range. Am I only allowed to charge him for 50% of the cost for a replacement? The damage is not "general wear and tear". The tenant dropped a pan from the cabinet and shattered the stove top. I do not want to overcharge my otherwise good tenant. 

This leads me to my second question: how does replacing an appliance that has gone past its "predictable lifespan" work? This is assuming the damage is irrefutably caused by negligence of the tenant. If a tenant broke my hypothetical 50 year old range, what % would I be able to charge for a replacement?

@Stephen Foltin

Jason is right. $300, at best, to account for vacancy, CapEx, repairs, etc. is far too slim to create a cash flowing property. You could rent the condo and potentially break even in hopes for future appreciation or you could sell it and use the money for a future investment. You could also keep it and use it as a line of credit depending on how much equity you have.

Duplexes in Charlotte are extremely rare. When they do pop up, they are often in very rough condition and overpriced. There are plenty of SFH's in South Charlotte that will cash flow.

You can definitely get a 5% down loan on a duplex or SFH as long as it is owner occupied for 1 year. Almost any lender will give you that. You could even get a 3% or 3.5% down loan.

I would consider saving up a little more than $10k at your expense before you purchase your next property- especially if you decide to keep the condo. A down payment, closing costs, immediate repairs, or a low appraisal could eat up the majority of that $10k right off the bat.

Glad to hear everything worked out great! 

Small multis are rare in all of those cities and the markets are very hot right now. Generally, the only ones that get listed on the MLS are in bad condition.

@Jimmy Presnell

Finding any multi family near Uptwon will be hard. Especially one that isn't in a sketchy area and not falling apart. 

I was in the exact same boat earlier this year. I was looking for a multi to house hack as close to Uptown as possible. I wasn't able to find anything that made sense. Ended up settling for a SFH outside of uptown.

Go to the Raleigh meetup. Plenty of seasoned investors attend each month.