All Forum Posts by: Jay Maranan

@John Underwood thanks! I start researching some companies.

@John Underwood thanks for the comment! What company did you work with to set everything up?

@Dmitriy Fomichenko thanks for sharing your knowledge and insight!! Great blog post by the way covering a lot of info. This is a nice starting point for me. Thanks again!

Hey everyone,

Can anyone provide any information like pros and cons of using a self directed IRA to purchase real estate? Also, if you have worked with any reputable companies and had good experiences, can you please share the company name? I am considering this option to buy, and was hoping to get some guidance as well has potential fees, upside/downside to this strategy. Thanks in advance everyone!

-Jay

@Brian M. Curious to know how the 1st Loan and 3rd loan (Equity) worked out/got approved. Are these business loans, or are all buyers collectively under 45% DTI?

Hey BP family,

I am trying to come up with a creative way to finance a second SFH I am in the works of purchasing and could use a little input.

I'm currently in the process of purchasing a 3/2 SFH in the Bay Area with a nice size lot (over 7,000 sqft). The seller and I agreed on a price at 1M (home is currently estimated at 1.15M) and since the lot is fairly large, I'd like to add a 2/1 ADU and rent for $2500-$2700 to help offset the mortgage. I spoke to the City Planning/Engineering, an Architech, and contractor and found that the cost of building a 2/1 ADU in the area costs approximately 190-200k.

My (VA) loan has been approved in underwriting at 950k, so I'd have to come up with an additional 50k to buy the house, and an additional $200 for the ADU. My plan was to take out a HELOC on my first SFH (about 250k in equity) to fund the ADU, but after speaking with my lender and a few other banks, it doesn't look like I will qualify for a HELOC since my debt to income would now more than likely be over 45% with having two mortgages totaling in about 1.6M, though my first SFH mortgage is taken care of by the renters.

I imagine these numbers may be high for a lot of folks, but this is the Bay Area for you. The reason I want to live in the Bay is because I have kids and all of my family is here. That said, this would be a long term play: buy and hold/fix and flip/ and partial house hack. My question is has anyone else been in a similar predicament (minus the numbers) to where you had funds/equity in one property, but couldn't necessarily get to it because of debt to income ratio, and/or other similar blockers? If so, how were you to move forward? Were you able to take out a HELOC/refi with over 45% DTI? If not, what other ways did you come up with to get funds?

Any info/input would be appreciated! Thanks in advance and hope everyone is staying safe out there!

@AJ Hu Sounds like $120 lesson. I’d say take it as a loss on move forward and find another plumber for future work. He earned $120 this time but lost more money from potential future business.

@Daniel Pessin You can google automated rent collection and you find a list of companies that provide this service for free most of the time. I did some research on several companies and ended up going with Cozy.co. It’s simple to use, free, and tenants can set up reoccurring payments.

Something to keep in mind is that once the rent gets paid, it takes 5 business days to get transferred into your bank account. You can pay an additional $2.99 per month for express pay (3 business days) if you choose. Either way there are several companies that provide this service. Hope you find something that suits you well! Good luck!

@Tony Robinson Thanks! 🙏🏽

@Tony Robinson Congrats!! 👏🏽👏🏽 I am also from California in the Bay Area and trying to find a house that I can hack. I love hearing stories like yours to keep other BP members inspired and motivated! Planning on investing out of state as well! Congrats again!