All Forum Posts by: Raju Pothuraju

@Mark Shafer, I would say also look at how long the town homes in that complex are sitting in the market before they sell and at what price: that gives you an idea of how quickly you can sell it if you needed to and at what prices. Generally TH seem to appreciate slower than SFH so make sure you buy well below market.

Hi all,

I got pre-approved for FHA loan in VA. My strategy is to house hack. I did the same thing in SoCal by renting out a room but that was at the peak of the bubble in overpriced area.

Now my plan is to get a single family home and rent out a room in basement to a friend. 

FHA loan 400k monthly $2467 taxes PMI insurance all included.

Rental market for single family home is $2200-2400

One room rent is $700

This would be a buy and hold compromise between being a pure investment property  and having an overpriced primary residence.

Does that seem like an OK investment? My concern is sustainability and scalability to expand my Rei portfolio with this mammoth loan that fills up my debt to income ratio. 

I am thinking this might be one strategy for those living in a high price areas.

Any input?

@Kenneth Soksave your energy for the Honey-Do list.

Back in the day, scrapping the pop corn ceiling was on top of my honey-do list. But then again that was in our primary residence back then... If you need to do some physical exercise anyway why not scrape away?

@Teague D. IMHO (going against the trend here) I would go with single family home in better neighborhood to build long-term wealth. Of course it depends on how much better location the sfh is in. I never had vacancy in my single family home in A neighborhood.

@Harris L.I am in a similar boat with my condo in So Cal. I am curious of the responses you will get here at BP

@Kevin Hunt

congrats on finding the deal! i think you have to compare what the rates for the 203k and fees are with HELOC options.

on a side note, one of the tips that was mentioned in BP podcasts was to pay a little bit more than 3% down payment for FHA - probably 5% down to give you the option to get rid of the PMI later on down the line without having to refi to a conventional and keep it FHA loan.

Good luck,

Raju

USDA uses gross for the most part. They do deduct child care expenses though for income eligibility purposes

Time is a good strategy IMHO- maybe have him call you in a few months if he still hasn't gotten a desirable offer?

Option 2: Maybe suggest he take out an equity loan (to pay for his immediate need to move and fix up the other house) and give you a 3 year lease option (with below the market rent with the option for you to sub-let) with the purchase price being closer to the price he wants? Structure it so you can get the cashflow now and he gets the equity he wants just a little later...

Thank you all for the welcome messages and recommendations. I have been listening to pod casts in BP and reading the pages on REI. I will also give my input on relavant posts that match my lessons learned and my personal experience obtained

@Greg Christensen

I am sure more experts in this forum would have better ideas, but here are some crazy ideas:

1) Timber harvest:

2) Cropland rental:

3) Hunting lease:

4) Cabin rental:

5) Storage Units