All Forum Posts by: Oscar Cardenas

Long term should be the same.

-Appreciation, I have heard many different opinions. My opinion and observation is that they appreciate relatively the same in my area. In my honest opinion, I believe multifamily will be appreciating better due to the popularity of house hacking. In my area multifamily is appreciating very fast due to increasing rents and popularity of house hacking.

-Some investors think that SFR is better long term due to higher likely-hood of long term tenants, But multifamily should get you overall much more rent. You should not have any trouble renting either out. I like to take the best of both worlds and stick to duplexes because in my experience Duplex tenant-hood is tends to be long term if the duplex is a good size and condition. Triplexes and 4plexes tend to be on the smaller side attracting temporary tenants.

just my opinions. :D

@Adrielle Tecklenburg

Covering PITI just from back house rentals is a wonderful deal. A lot of the well known rules only work in specific areas and markets.

Just pencil out how much PITI will be. How much expenses in utilities/HOA/fees will be. Consider some % vacancy loss. Some Cap ex % loss depending on condition. Some % saved for maintenance every month. Some % for proper management.

Do that for each deal. Anything above this is cash flow. For house hacking and in particular California, the goal for many is breaking even or have abit if cash flow considering you will be paying nothing down with a VA loan so it's infinite return on investment.

Not trying to deter the purchase of an SFR lol. Just giving my thoughts on comparing the two.

@Turon McManus

-The down payment for both would be the same if it's a triplex or SFR for an FHA loan.

-Prices would be somewhat similar depending on area. You would think an SFR would be cheaper but at 3bedrooms there are a lot of retail buyers.

-rental income should be higher on a triplex due to having own kitchen, privacy, ect. Not by too much, but noticeable.

- I am not sure about this part but I would imagine more headaches managing room mates in an SFR due to more common area conflicts.

-biggest issue with a triplex is simply finding one.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Silverton.

Purchase price: $362,000
Cash invested: $7,200

Purchase price $293,400 through an FHA 203k rehab loan. 3.5% down payment and $13,500 of my closing costs paid by the seller and my 2.5% realtor commission contributed to the down payment. $60k major remodel. negotiated 30k off original offer. Cash flows very well now. Straight off the MLS.

What made you interested in investing in this type of deal?

Everyone should be house hacking.

How did you find this deal and how did you negotiate it?

MLS, multi offer situation. Inspection was done by previous sale fail but I still had my own inspector come out. Found alot of attached carport dry rot and negotiated the seller down 20k + seller paid closing costs. Experienced negotiator through evictions experience and realtor experience.

How did you finance this deal?

FHA 203k Rehab loan. (not recommended unless you have a contractor that is willing to do alot)

How did you add value to the deal?

converted office to bedrooms and extended carport to include 2 cars per unit. Also separated yards to better allow pets and charge pet rent and premium rent. other regular cosmetic rehab.

What was the outcome?

Appraised at $390k and receiving higher than expected rents due to great location and pet allowance.

Lessons learned? Challenges?

Have your circle be experienced in rehab loans before getting in..

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the agent. Used a regular lender. Convinced the contractor to do the large renovation through this type of loan by offering to do the extra paperwork and planning associated with this type of loan.