All Forum Posts by: Nicholas L.

@Andrew Guzman

you'd refinance out of your current loan (assuming you had enough equity) and use a low DP loan again for the next property.

@Andrew Guzman

Short answer: no.

Why not just house hack again?

@Andreas W.

eventual rent increases

selling a property and using the proceeds for something else

selling a property and using a 1031 exchange

tax benefits

@Isidro Rodriguez Jr

I'm with @Travis Timmons on this.

Same point: if you borrow 100% of the purchase price and purchase in an area you're not familiar with, you will just lose money.  Everyone else involved (agent, title company, PM, contractor, bank, etc.) will make money; you will not.

A HELOC feels like free money and definitely is not.

And, rehabbing out of state using 100% borrowed funds is hard mode.  I'm working on a rehab 30 minutes from me, and it's a challenge.

If you posted and said, "I'm interested in Pittsburgh solely because of the price points and don't have any intention of visiting or setting up a team," I'd say, that's nice! Don't buy something here, then.   Keep saving up.  House hack in California instead.

Hope this helps.  We're happy to answer any additional questions you have, and as you can tell, we're trying to talk you out of it, and not into it.    

@Charles Bishop

the 1% and 2% rules have been misinterpreted.  all they do is help screen out properties.  you would never, ever buy a specific property because it met a "rule."  but if you have 100 properties to analyze, you could quickly screen certain ones out and narrow down to, say, 10, or 5.

i don't use the rules at all because all i do is look at specific deals.

it generally makes sense for new investors to start with a house hack.  the purpose of a house hack is to build equity.  then once you're in a stronger financial position, you can look into rentals.

@Erica Morrison

Hi Erica. I (1) don't invest in STRs, and (2) don't know much about you, but I always get nervous when people propose buying an STR solely for tax reasons. And I think it's kind of crazy that a CPA would "tell you" to buy an STR... was that just one option of several he gave you?

So I'll ask... are you otherwise interested in owning and operating an STR?! What if you rush and buy a dud? STR is ruthlessly competitive right, now so losing money operating it will more than take away the tax savings...

We've just seen several posts here in the forums here from folks who (1) bought in this price range, (2) couldn't get enough bookings to offset the monthly costs, (3) started losing money, and then (4) couldn't get their sale price... making them really stuck.

Just trying to watch out for your capital here... if you are otherwise passionate about STR operation or have been wanting to buy a vacation property for years, great. But I did not see that in your post.

@Brandon Garcia I think I hired a CPA when I got to 5.  I think it depends on your overall tax situation and if you have anything else complicated.  One property is not at all difficult to do yourself.

@Nathan K.

sounds like you're doing great. one way to recoup capital faster is via BRRRR. another way to purchase with a lower down payment is seller finance. congrats on your success so far.

@Charles Bishop

yes and yes.

yes, they are still a sensible way to build wealth.  yes, 'cash flow' in the short term is much more challenging with prices and rates high.

i'm buying right now primarily for equity.  equity can be turned into cash flow in the long term.

@Kendra Mattson

Hi Kendra.  Are you able to go to Cleveland and meet a few in person?  That's what I would do.  Who are the other investors working with?

And, you mentioned you're diversifying - do you own rentals only locally, or out of state as well?  Out of state is more challenging than as it's been presented.  Given the current rate environment I believe the benefit of out of state has diminished, even for those in HCOL areas like CA.