All Forum Posts by: Paul Lovely

20 mil is fine. I had a similar question when I was researching LVP for a remodel at my duplex, and the consensus was most people were comfortable with a minimum of 12 mil for a rental, and I decided to go with 20 mil for extra protection/durability. 40 mil seems excessive.

Hey Matthew, I'm a fairly new investor in Concord, NH (26 years old). I currently am house hacking a duplex in Concord I bought 3 years ago and also have about 100k in a HELOC. My plan is to BRRRR and potentially flip depending on the end result. I would attend the NHREIA meetings to network and connect with agents & wholesalers to start building a deal flow to give you some properties to analyze. Underwrite your deals conservatively and be patient. I would calculate rehab costs based on outsourcing everything to give you as much flexibility, and get itemized bids from contractors so you know exactly what you're paying for. Also, pay contractors in installments based on the work they've completed, and if you have a great contractor treat them well and pay them quickly. There are some great tips in the BRRRR book and the Book on Flipping Houses. I have yet to do a BRRRR/Flip, but this is how I will be approaching things.

@Katie Miller I'm hoping to complete my first BRRRR, so just 1 property. I've been house hacking a duplex since late 2019 and have built up substantial equity from the housing boom which allowed me to to get a HELOC. I would like to build a business around the BRRRR method and am currently working with lenders and wholesalers to get the ball rolling!

One way would be to utilize the BRRRR strategy to temporarily use private and/or hard money loans to purchase and renovate a distressed property, rent it out, and then refinance into a conventional loan afterwards based on the property's after repair value (ARV). This would allow you to use the mortgage from the refinance to pay back your private/hard money. If the ARV comes in low or you go over budget such that you'd have to leave some money in the deal, you could either sell and likely still turn a profit, or find a private money lender to close the gap for some kind of equity split. If you have the ability to get a HELOC or HELOAN or could do a cash out refinance on an existing property, these funds could also be used.

That is AWESOME, congratulations! I am looking to do this exact strategy and just set up a HELOC on my duplex. For your BRRRRs do you ever have to leave money in the deal? I'm struggling with this concept because if things don't go 100% to plan, I'd be left with a HELOC balance to pay back or I'd have to sell the property (unless I only had to leave a few thousand in the deal). As I am fairly new with limited capital, I wouldn't be able to comfortably leave tens of thousands of dollars in a deal. Again, Congrats!!

Hey everybody! I'm debating between 2 HELOC options to use for my first STR purchase. For context I bought a duplex in 2019 that I'm house hacking for $229k and it just appraised for $375k. Citizens bank did the appraisal and offered me a $95k line at 5.5% variable (Prime + 2.25%). This is 85% LTV.

I also put in an application through a local credit union and they had conditionally approved me for the same line at 3% fixed for 3 years, then variable so much better terms. However, their AVM computer appraisal came back wildly low at $290k so they are requiring that I pay for an appraisal which would take another 8 weeks or so. 

I plan to use the money for my first STR as I previously mentioned, so the interest savings is well worth the cost of the appraisal. My main concern is having this appraisal come in artificially low (banks being conservative) and being out the cost of the appraisal and behind 8 weeks at which point my offer with Citizen's would have expired. One one hand, the more money I can access, the bigger and better STR I can get. On the other hand, a lower appraisal could protect me from becoming over-leveraged. I'm having a hard time balancing these two concepts.

I have a call with The Mortgage Shop next month and I'm very excited to get started. Thanks for reading!

Thank you everyone for the replies! I will definitely be doing a rent increase. 

@Joshua Tessier well put with the CEO comparison. I'll double check the snow laws for Concord, but I'm pretty sure I'll just do snow removal myself.

@Matthew Dennehy Thanks for the suggestion to get the lease looked at. I'm amending the current lease but I will definitely have it looked over.

@Charles Carillo I am planning on doing some upgrades when I close, so I'll be sure to use this to at least partially justify the increased rents in tandem with explaining the great deal they're currently getting- great point! Thanks for the insight on the snow removal as well.

@Nathan Gesner Thanks for the reply. I'm doing my best to avoid nice-guy syndrome, and I will definitely be raising rents. I shouldn't have a problem finding a new tenant if they are unwilling to budge. Given the extremely low vacancy rates we're seeing and the rental comps, I think they'd be hard pressed to find a better deal. Thanks again!

Hi everyone!

I’m excited to say I’m closing on my first deal (a house hacked duplex in Concord, NH) after four years of studying books, podcasts, and forums through this awesome website! So thanks to everybody who takes the time to contribute and share their experiences, it’s very helpful.

I’m writing my lease for the upstairs tenants, and was hoping for some insight. Currently, the tenants are paying about $200/mo below market value and on top of that get access to a detached garage and 2 additional off street parking spaces. I will be parking on the street. Would it be reasonable for me to increase their rent right off the bat $50-$100 and/or ask them to be responsible for snow removal (they currently don’t have to maintain the driveway)? I’m looking to be as fair as possible so please let me know if I’m out of line. It’s a year to year lease so it would be nice to lock in better terms right away. Thanks again to everyone for reading!

-also the tenants have been very compliant so far and really want to stay, so they seem pretty reasonable

Hey Javar, I'm in the same boat, I'm a 19 year old college student and I face similar problems. I have been focusing on building credit, and I've been hoping to begin my journey with a 3 or 4 unit rental property. To do this I plan on using an FHA and if I don't qualify directly, I will look into having a co signer. I think something like this could be a good starting point, and a good way to build equity and cashflow to get the ball rolling. Best of luck, Paul