Hey friends!
I'm a new-ish investor and looking for some advice on how to approach my next 1-2 deals. My head is a bit fuzzy right now with trying to think it all through and I could use some other perspectives. I'd be So grateful, and maybe others in my position will benefit from this. Thank you!
Here we go:
I live in Portland, OR. (I know, I know ugh!)
I currently own 2 SFR rentals. Each has 20-30%+ equity in them. One has been refinanced recently already and the other I've owned for 17 months.
I don't live in a house I own. I currently rent a room for $800/month.
I'm looking to buy my next 1-2 houses. Ideally, for my next buy, I'd like to purchase an owner occupied house and house hack it (add ADU/living space and rent to roommates) for most leverage. This would also give me access to a HELOC at some point later.
However, due to the very tight Portland market, and my picky parameters for buying a place to LIVE in, there is very, very little available. I'd rather continue to rent, and just buy rentals than live in a neighborhood I don't like. But, Ideally I'm looking for a home now.
I am approved for a max loan amount of 450k and have 100k in cash which I am borrowing from my parents. I have weird self employed income and my lender worked wonders to make this happen.
Here's the deal: If I can't find an owner occupied house soon, I'd like to keep my options open and possibly buy a rental instead, or first, which I'd house hack/Rehab BRRRRR. Due to the current dip in the market, I feel a time-squeeze to move on something sooner than later. Also the money I have for a downpayment has a time stamp on it before I need to start making payments on it.
Ideally, I'd like to be able to do both: Buy a rental now if I find one, and then soon after also buy an owner occupied house.
I'm having a headache of a time trying to figure out if I can do this!
Possible scenario:
Buy a SFR rental with financing + 15% down ( my lender can do this) and use 100k parent cash for downpayment and minor rehab/add value.
Hold and rent house (with desired cap rate and cashflow only of course).
Soon after, (maybe weeks or months? After I have a rental contract on my rental) purchase an owner occupied home with financing.
But I need a downpayment. I was thinking of asking a family member if I could borrow it. And then the plan would be to refinance one or both of these homes in 6-12 months, after I have done improvements to them, and the appraisal period most banks require has passed. Then I'd use the cash out to pay back my private lender/family member.
If I can't find a family member, then I'd look for a hard money lender. But I'd be for a long time period (181 days months due to appraisal period) and that could cut into my profit margin. Any other ideas of how to get the downpayment if needed?
What do you think of that?
I don't want to over extend myself, however I DO want to take calculated risks. And because of the market, I want to find a way to do both of these if possible.
Given my GOALS above, and the market in Portland, I'm curious if anyone has advice or an opinion on this? Do you think this is a good idea? Any questions or concerns? Or advice on how I might do this differently to accomplish my goals?
Thank you for your time and energy. I sooooooo appreciate it!
Warmly,
Robin Jackson
