All Forum Posts by: Pari Z.

Thank you for the insight Dan!

We live in San Diego and have been saving up to invest in our first property. The market here is obviously tough (and we'd like to invest here or nearby for several reasons), but we have heard about second home loans that have more favorable down payment and interest options which could increase our buying power and allow us to cast a wider net during our property search.

Understably this type of product would have to pass the sniff test. Considerations we've heard/read about are: distance to primary residence, location of the property in comparison to the primary residence (ie, if we live by the beach and we buy a property by the beach, it's likely not our vacation or second home, whereas living inland and buying in downtown or by the beach could be a more likely second or vacation home), and minimum timeframes for owner occupancy (like 14 nights if we eventually choose to do STRs there).

We live inland and if this does allow us to buy at a higher price point, we're open to looking in more tourist-y areas of the city. We are also really curious about the Big Bear area (in zones that allow STRs). Ideally, we're able to find a loan at 10% down, at or below current rates. Our thinking is, if we can put down lower and make the deal pencil at the higher rate, we can always refinance when rates drop, which we understand is expected in the fall/winter 2024. But even if they don't fall soon or enough, we'd be locked into our rate and can look to add value other ways until better refinancing scenarios present themselves.

Investors, have you used this type of product? If so, what was your experience?

Lenders, is this truly an option and if so, what are down payment percentages and interest rates you're seeing? And what are some of the parameters that we'd be required to meet (ie distance from primary residence, etc)?

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Hi there!

My partner and I are looking to create a portfolio of long term rental properties to create freedom and independence from our W2 jobs, and create a foundation for generational wealth. Having a toddler now has fueled and accelerated or desire to make some actual moves towards this goal. 

My partner's profession is not linked to real estate, but he is sharp as a tack when it comes to finance and financial analysis. And for over 10 years, I have been in multifamily affordable housing development, and I am very familiar with asset management, property management, construction, and tax credit financing.

We own a primary residence and plan to stay here (house hacking is not for us), and have been saving scrupulously for the down payment of our first investment property, ideally a 2-4 unit multifamily. 

Because of my professional experience, we'd prefer that our properties be nearby so we can self-manage and save the 5-8% typical of property management fees, at least until our portfolio grows. But given our high cost city and sky rocketing interest rates, early and simple analysis of any property has so far resulted in negative cash flow. 

My main goal is to understand what types of loan products are available, and we are now more open to analyzing out of state purchases.

We are eager to make our first purchase within the next 3-6 months. The mid term goal is for me to replace my W2 salary within 2 years, and shift full time to the management and expansion of our own portfolio, with the goal of replacing my partner's W2 salary within 1-2 years after that, so that he can join me. 

We have a toddler, and hope to have another kid soon, so between that and our full time jobs, life is chaos lol. But we have never felt more strongly that this is the path for us to "reduce the noise" and be in better control of our collective futures. We are both self-made, and while the goal feels daunting, we know we have it in us to hit it.

Long story short - I love my job, but I'm done making money for other people!