All Forum Posts by: Oscar Cardenas

I would suggest talking to a realtor that also invests to guide you.

so, 203k Loan does have more than the issues you have heard. Highly recommended to get a contractor that is willing to do 203k well before an offer. 203k is a big hassle for contractors so you DO NOT want to do it last second.

also 203k loans have a longer close time, enough to deter some seller.

203k has much higher closing costs and higher interest rate. After some months you can do a streamline FHA refinance, but you should speak to a lender to plan that and a refinance will add more closing costs to an already high amount.

As you can tell, the loan is complicated and most realtors and even lenders will not know much about it.

Also, don't assume foreclosures are a good deal. With the introduction of online auctions that simply get restarted if the secret reserve amount is not met, I have noticed the end result has been rather lackluster. Maybe its just my area though.

I am definitely not trying to scare you, just mentioning that some of these tactics require good help.

Best to speak with an attorney for your area but, from my experience in California and Oregon it would be an official eviction.

Depending on the state, the COVID eviction bans might only be for non payment of rent reasons. In other words, evictions are still being filed, but the basis (Termination Notice) cannot be for non-payment of rent, at least in Oregon. 

Every state will be vastly different so as mentioned before, consult an attorney or an eviction service.

Best to speak with an attorney since there is an strong effort to get rid of wholesalers from lobby groups so laws can change suddenly.. Although I understand even a lot of real estate attorney's do not even know what a wholesaler is.. 

Anyway, from what I understand, what you heard is correct. As a wholesaler you are not selling a property, you are assigning a contract. Every wholesaler seems to have their own risk tolerance with how they advertise but know this is all gray area business. This is why a lot of wholesalers go about only finding buyers through cash buyers email lists or reaching out directly, otherwise it can be seen as you pairing a buyer and a seller of real estate which does require a license.

Please do not make a decision based on my next comment but In all honesty, I have yet to find a wholesaler getting in trouble for advertising the wrong way. Most I have heard about getting in trouble is how they come across to both the buyer and the seller. Some wholesalers do not disclose what they are attempting to do with the owner so they get sued.. Some wholesalers do not communicate properly with the buyer so they get sued (this one happens more since buyer's non refundable earnest money is at stake).

Anyway, if you find any properties, send them my way! I always have active investor clients that can do hard money and I might even buy one or two myself.

@Todd Powell

Great work! Good to see more success in the Willamette valley. I gotta start following you around haha 😂.

@AJ Smith

I created a post on house hacking strategy and using fha vs conv. I don’t know how to link it from the phone though lol.

Summary recommendation

fha for multifamily

Conv for single family.

Recommend getting a multifamily first. Or rehab loan if you can find the right team members.

@Abel Curiel

Glad to help! Thanks for the comment.!

Hello Biggerpockets.

Its The People's Agent here to give more useful info since I am always learning new techniques working with investor clients and doing investments myself in Oregon.

This post is about deciding which loan product to use when starting out your house hacking journey. Choosing to go FHA vs Conventional is more important than most think. I am a real estate agent and not a lender so I would speak to a lender to confirm before making the decision.

House hacking is mainly desired as a means to acquire long term rentals with a low down payment loan product reserved for owner occupants. In all of these products there is a time you must live in the home before moving out which is usually a year. For cash flow purposes it is generally desired to go multifamily (1-4 units) instead of Single Family Residences since Single Family Residences tend to not cash flow in many states.

FHA: 3.5% down payment with a 1 year occupancy requirement. Single family residences vs multifamily(1-4 units) residences offers no difference.

Conventional: 3-15% down payment, occupancy varies but usually 1 year. Single family is usually 3-5% down then jumps to 15% for multifamily.

USDA: 0% down payment, occupancy 1 year. Single Family Residence ONLY.

I can make another post later on the details of rehab loans.

Judging from the info posted one would assume you can simply buy a multifamily (1-4 units) using an FHA loan then rinse and repeat once a year or two. Turns out it is a bit more complicated than that. After speaking with more and more lenders it is possible to have more than one FHA loan but very unlikely to happen.

So, in places where single family residences get into negative cash flow you can feel stuck after acquiring your first multifamily (1-4 units).

One of My recommended strategies: House Hacking for Complete Noobs.

1st Property: Buy a cash flowing Multifamily using an FHA loan 3.5% down. Your budget also goes higher based on current rents (75% of rents added to income for budget purposes).

2nd Property: Buy a House with an ADU (Additional Dwelling Unit) using a conventional loan. Even though you will get rent from an ADU, Lenders still see it as a single family residence depending on public info and zoning so you should see 3-5% down payment.

3-4th Property: Hopefully by this time your first property has gained enough equity (~25%) to refinance into an investment conventional loan. I would do this ASAP. If successful then you are open to using another FHA loan to buy another multifamily. If not then repeat steps that got you your second property.

There are better strategies like using rehab loans and buying right to be able to refinance into an investment loan very quickly but this post is meant for the people who are likely to be working with agents and lender that are not knowledgeable about the subject. You would be surprised how little agents and lenders know about their subject.

Thank you all for reading and happy investing! Always here to help or partner!

@Oscar Cardenas

Rentometer * dam auto correct.

What I did though is look at active rentals through Zillow and price yours accordingly. My duplex turned out to rent for $300 over rentometer numbers.

@Daniel Colon

The simple method.

-buy a turnkey multifamily and use an fha loan to house hack.

-find rents through tengo meter and check the appraisal numbers when you could.

-as for portions of rent to save. Different areas call for different numbers but it’s usually: maintenance, cap ex, vacancy rate, and property management.

You can do fixers with an FHA 203k rehab loan but that requires some knowledge to do. 203k comes with additional fees, restrictions, interest rates, and complications if you don't have the right team.

Rehab loans can be great for investing, but learn as much as you could first. Stuff like ARV, Rehab costs, holding costs, ect start coming into play.

@Benjamin Ford

Glad it’s paying your monthly payment. If anything debt pay down and appreciation should get you to positive net worth faster than suffering through paying large monthly payments on student loans.

Apart from that there will be rent increases to increase cash flow later. It’s a good way to go.