All Forum Posts by: Ou Wang

@Benjamin Pessah Thank you! Definitely dived in on this one and making things work one piece at a time. Agree things could've been much worse, I have tried many things including consulting with lawyers and even considered starting a lawsuit, thought at the end I decide to be patient, as the solar company ended up agreeing to help me out (after making literally endless calls), even though it is definitely taking a much longer period than I'd like to. At the very least, I talked to the solar loan company and they understand the situation and is ok with freezing the loan until I have the issue resolved.

Hi @Scott Mac! Thank you for providing your perspective - I think you're absolutely correct about solar panels not being a positive in a deal, especially when factoring in the cost of removal and replacement, let along a loan and an undisclosed lawsuit. For this one I definitely learned it the hard way. 

On top of this, when I move out of the unit and rent it out, it'll not benefit me personally that much since it'll probably be tied to the tenant who is paying the utility bill. Also, since the unit HAVC is powered by gas, the electric bill was so low that it'll not provide much benefit regardless. AND, the seller also already claimed the major tax credit at time of installation (which we did use that to negotiate down the purchase price).

Bottom line is that the risk of inheriting a solar panel and the loan is quite large, which is something I did not foresee. If I were to do this again, I would be much more aggressive to negotiate down the purchase price factoring in all of the future cost (especially cost of removal and replacement), and ready to walk away knowing that I'm dealing with a seller who's apparently hiding something or made some poor choices that I had to inherit.

@Eddie Fleckenstein Thank you! Congratulations to you too. Will definitely share more as things unfold. 

@Dmitriy Fomichenko Thank you!

Hi all. New investor from Boston, excited to attend the BP conference for the first time. I've done my first house hack this year and am looking to expand to my next house hack deal and get into investing in larger multi-family apartment complexes. Happy to connect!

Investment Info:

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

Purchase price: $705,000
Cash invested: $70,000

Classic house hack situation, with a TON of mistakes/lessons learned.

This is my first home, house hacked with a 3.5% FHA loan. Monthly PITI + MIP is around $4000. Rented out one unit (3b1b) for $2,600 and a bedroom for the unit that I live in (3b1.5b) for $900. I have another family member live in my unit so it's like a house hack for two people.

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

In late 2020, I discovered BiggerPockets and have been a reader/podcast listener since, trying to absorb everything there is to know about buying my first home that would also act as an investment property. From all the researches I've done, I think that a triplex or quadplex in the Greater Boston area via a FHA loan would be idea. I was pre-approved for 800K-1M with FHA and actually have found an agent via this forum.

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

Through the MLS. At that time the market was already very hot, and as soon as this property came on market, we looked at it in the morning and submitted an offer of 725K in the afternoon which was accepted an hour later. I've already looked at a few properties at the time so was comfortable to make that offer in a short time frame, and also knowing if we wait to the next day, another open house would create more competition.

How did you finance this deal?

3.5% FHA Loan with 2.5% interest rate.

How did you add value to the deal?

- Turned the rental unit from a 2-bedroom into 3-bedroom, and rented to section 8 housing. The previous rent was $1900 and I was able to get it rented out for $2600.
- Using MassSave, upgrading the HVAC system to combi-boiler for main unit and mini-splits for rental unit. Also scheduled insulation work.
- Tree removal, asphalt installation, roof replacement, windows replacement, deleading, pest control, interior design. Working through solar panel issue (hopefully).

What was the outcome?

I think this deal gets me in the door and see what it's like to be a landlord, with a lot of lesson learned. First year financials are not great given the amount of repairs and capEx, but I expect things to get much better as I refinance out of FHA and move out and rent out my unit. All the lessons learned I shared here is just a tip of the iceberg...I think if I were to get my next deal I'd feel so much more prepared now.

Lessons learned? Challenges?

The seller asked us to take over the solar panel loan (33K). However after taking over the solar panel loan, the solar company told us that because of a lawsuit with the previous seller, the solar company had nothing to do with the existing solar panel on the house. The solar panel even has never been turned on before. It's been 7 months now and I'm still trying to get the solar company to turn on the solar panel. Be very careful when you're assuming a solar loan on top of your mortgage.

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

Austin Negron

Investment Info:

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

Purchase price: $705,000
Cash invested: $70,000

Classic house hack situation, with a TON of mistakes/lessons learned.

This is my first home, house hacked with a 3.5% FHA loan. Monthly PITI + MIP is around $4000. Rented out one unit (3b1b) for $2,600 and a bedroom for the unit that I live in (3b1.5b) for $900. I have another family member live in my unit so it's like a house hack for two people.

Factoring in the utilities, first-year repairs, and quite a few unexpected capital expenditures, cashflow is currently in the red. I have a feeling that with this property, I've learned so much that it in a way it has really prepared me for the challenges ahead. Good thing is I am turning this property around one small step at a time, which I'll share more as I progress.

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

In late 2020, I discovered BiggerPockets and have been a reader/podcast listener since, trying to absorb everything there is to know about buying my first home that would also act as an investment property. From all the researches I've done, I think that a triplex or quadplex in the Greater Boston area via a FHA loan would be idea. I was pre-approved for 800K-1M with FHA and actually have found an agent via this forum.

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

Through the MLS. At that time the market was already very hot, and as soon as this property came on market, we looked at it in the morning and submitted an offer of 725K in the afternoon which was accepted an hour later. I've already looked at a few properties at the time so was comfortable to make that offer in a short time frame, and also knowing if we wait to the next day, another open house would create more competition.

How did you finance this deal?

3.5% FHA Loan with 2.5% interest rate.

How did you add value to the deal?

- Turned the rental unit from a 2-bedroom into 3-bedroom, and rented to section 8 housing. The previous rent was $1900 and I was able to get it rented out for $2600.
- Using MassSave, upgrading the HVAC system to combi-boiler for main unit and mini-splits for rental unit. Also scheduled insulation work.
- Tree removal, asphalt installation, roof replacement, windows replacement, deleading, pest control, interior design. Working through solar panel issue (hopefully).

What was the outcome?

I think this deal gets me in the door and see what it's like to be a landlord, with a lot of lesson learned. First year financials are not great given the amount of repairs and capEx, but I expect things to get much better as I refinance out of FHA and move out and rent out my unit. All the lessons learned here is just a tip of the iceberg...I think if I were to get my next deal I'd feel so much more prepared now.

Lessons learned? Challenges?

- The seller asked us to take over the solar panel loan (33K). However after taking over the solar panel loan, the solar company told us that because of a lawsuit with the previous seller, the solar company had nothing to do with the existing solar panel on the house. The solar panel even has never been turned on before. It's been 7 months now and I'm still trying to get the solar company to turn on the solar panel. Be very careful when you're assuming a solar loan on top of your mortgage.

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

Austin Negron