All Forum Posts by: Richard Gonzales

@Rene Owczarski Very good points, I appreciate it. I definitely don’t want to get in over my head and wind up strapped for cash, especially with taking on additional loan payments. I have learned very quickly, with my current property, that doing renovations is not something I personally enjoy. I brought in a contractor to finish a lot of work that I was taking months to complete, they got it done in days. 

I’m very new to investing. I bought a duplex last year as a house hack. It has taken me longer than I’d hoped to get the downstairs unit ready to rent, but it’s finally ready. After purchase, I saved up and payed for the downstairs rehab with cash. The upstairs, where I live, needs a bathroom and kitchen remodel to get the rental income I’m looking for and I don’t have the cash needed to do it.

I really want to scale up and get my next property so I’ve been looking into my options. I had an idea today and would like some opinions.

I'm in a very hot market and with the remodel I did downstairs, I should have quite a bit of new equity. The idea is to get a HELOC on my current residence, use that HELOC to get a hard money loan to purchase a distressed property, BRRRR it and use the equity in the new property to pay off the HELOC and fund the remodel in my current house hack. Then refinance my current property to BRRRR more new properties. My other idea is to use the HELOC to finish the renovations on my current property. I would like to keep my homestead tax credit through this process. Thoughts?

Imagine if the U.S. had no debt and a $4 trillion emergency fund right now... Of course, I’m not smart enough to understand the intricacies of the national debt. I’m a huge Dave Ramsey fan, I paid off all of my debt before saving for a down payment on the duplex I live in now. That being said, I still plan on leveraging to obtain more properties in the future, but this pandemic has definitely made me re-think how leveraged I want to be and what my reserves should be

Closed on the duplex earlier today! Can’t wait to get to work on the lower unit so that I can get tenants in. 

I have to agree with @David Barnett, I accumulated around $25k in student loan debt (never graduated) as well as a car loan and credit cards. I used Dave Ramsey’s system to pay it all off and let me tell you, that was not a fun 3 years. You still have time to apply for scholarships. If you apply for 1 scholarship every day until you graduate, I’d say you’re chances are pretty good. Its easy to tell yourself “4 years is forever away, I’ll figure it out then,” until you have to make that first $300+/mo payment.

Will you be living in one of the units? If so you should be able to put down as little as 3% with a conventional loan, at least that’s how it is here in Indiana

@Nathaniel Hovsepian Long story short, someone else got the property on contract then backed out, and now I have the property on contract. Just had the inspection done and, aside from a few things, everything looks good. Closing date is set for Jan. 31 but we will likely close sooner as long as everything else checks out. Thanks again for your advice!

@Brian Sparr and @Nik Corbaxhi thank you! I’m really excited to get the ball rolling on investing in real estate

Hey guys, I have a duplex under contract and it will be my first home purchase. As I’ve never been through this process before, I wanted to get your opinions. Do these closing costs seem pretty typical? 

Purchase price is $79,900 with 3% down, conventional loan.

As far as your concern about drowning in a mortgage goes, I think that as long as the mortgage for your house hack is something you can afford to sustain without tenants you should be fine. After getting a good tenant in place and making sure to account for vacancy in the rent, let’s say 5-8%, you will have some security if you have a vacancy for a month. I’m also new to real estate and this is the advice that others in the forums have given me. I just had an offer accepted for my first duplex, and the monthly payment will be 2/3 of what my current rent is. My plan is to pay myself the full rent amount, for the unit I will be living in, into the account that I use to manage the property. I also plan to save the cash flow as an extra bit of reserve for unexpected issues that might pop up.

I found my deal on MLS, but the better deals are most likely off market. Calling landlords that have units listed for rent on craigslist/Zillow and asking if they are interested in selling could be a good method for finding deals. Also check out your local REIA, I've been to two of the monthly meetings here and at both of them there were wholesalers and investors that had deals they were offering to the group at a lower price before listing them publicly. Not to mention the wealth of knowledge and experience gathered in 1 room, it's great for networking and learning.

Last but not least, listen to the BiggerPockets podcast weekly, even the episodes that don’t pertain to house-hacking, it’s a great way to stay motivated and get ideas for what you want to do with your investing short and long term

-Rick