All Forum Posts by: Richard Phillip Lewis

CONSERVE. Your. Cash. 
Buy an existing multi family and house hack. Quad plex is ideal. See if real estate is for you. Trust no one with your money. Not even your contractor friend. Study what needs to be done to learn everything you need to know about the rehab process, vetting contractors, managing debt, vetting tenants, taking rent. Find a reputable real estate attorney. Don’t tell him about the cash you just got. Just say you want to know the rules of renting in your state. 

Hi Guys, 

I live at the Jersey shore and love playing beach volleyball in the summer. I’d love to put together a volleyball team or teams to play in the Gee Gees League in manasquan, Great American Volleyball League in Point Pleasant Beach or Belmar Beach and maybe even the Headliner Volleyball league. I also play beach volleyball at a private beach court in the summer as well. 

I think it would be a great way to network, get outside and meet new people. 

Sign ups usually start in late March / April. 

Let me know what you think 

Hi David, I just finished up a gut

rehab on a duplex in point pleasant. 

I also have over a decade experience with sketchup and can get your a basic floor plan / rendering.

If you can send me a basic floor plan and a picture of the house I can see if I can assist you with what you seek.

I will also say that having a local architect do a drawing with specifications is most likely much cheaper than the change orders you would have without the architect drawing. 

Here is an example of a drawing I did for a landing for an inspection at my house. 

I'm in the process of gathering applications to rent my recently renovated duplex in Point Pleasant, NJ. My initial plan was to simply have tenants pay Rent + Utilities. I showed the property the other day and a tenant asked if I would be paying for the water bill? I said I wouldn't be since the duplex has all separate meters for each unit for all utilities. The tenant said "Oh, just so you know the water company will put a lein on your house if the water bill isn't paid" - This caught me off guard. I looked it up and the tenant was right. 

My Question: How do you handle utilities? Do you pay for the water bill and just have the tenant pay you back? Do you include a flat rate in their rate to cover the average water bill and eat the difference? 

Thoughts?

Hi Joshua, I recently signed on with my CPA Danielle Rutigliano. She specializes in real estate investing. She been very helpful so far! 

Her website is: https://bookkeeperforrealestate.com/

As an agent - I have seen this happen a lot lately. My advice would be to not close on the property till the seller closes on their purchase. This will force them to actually have a closing in order to get the cash they so desire. 

Now if the seller is saying “I need the cash from this sale to purchase my new property”…your agent needs to negotiate and your attorney needs to negotiate very strong terms for their “use and occupancy”. Can you charge them a hefty rental fee if they stay beyond a certain amount of time? I don’t know that answer.

You could also demand proof of the other closing and find out when the date of the sellers purchase is set to close. Maybe ask your attorney to ask the sellers attorney for proof of closing. 

Another option could be to hold a large chunk of the proceeds from the sale back in escrow till the seller vacates the property after closing. 

Ultimately, trust your gut. If the seller seems sketchy then they are. If they are forth coming with proof of closing then you shouldn’t  have any issues. Ultimately, they put their house in the market. They DO want to sell. I have seen your scenario happen many times with no issues at all. 

Sounds like working on getting the Mortgage Insurance removed is the best first step. The goal is free up some cash flow. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $580,000
Cash invested: $150,000

House Hack Duplex using a 203k Loan to Rehab it

What made you interested in investing in this type of deal?

My goal is to acquire cash-flowing multifamily assets that need renovation to push equity appreciation while also Improving my DTI. This will allow me to acquire more properties in the future when it comes to qualifying for more debt.

How did you find this deal and how did you negotiate it?

MLS - I am the real estate agent - We received a $20,000 Seller Credit towards repairs.

How did you finance this deal?

203k Loan - My Cash

How did you add value to the deal?

We took down a wall in the living room that connected to the kitchen. The created one large space to make the 1000 sqft space feel larger. We gutted and renovated the bathroom and the kitchen. We removed and replaced all the insulation and sheetrock.

What was the outcome?

We have a fully updated duplex in a hot rental market that will appreciate over time.

Lessons learned? Challenges?

Think carefully when buying property in a flood zone. Get a crawlspace specialist to inspect the crawlspace. Don't rely on the Home Inspection report to catch everything.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the real estate agent. I worked with Cross Country Mortgage for the 203k loan.

@Andrew Postell I know owner occupied property can be restrictive. It is our plan to move on to something else in 3 years. Maybe we change the financing then?

I spoke with the lender that currently has the debt and he suggested maybe going from FHA to conventional or modifying by some of the terms of the debt to help reduce the payment. The key though is a higher appraisal.

Im in the process of finishing up a 203k House Hack Duplex. I got a good rate of 6.25% on my mortgage given today interest rate environment. I will be living in one side and renting the other side. I would like to refinance out of the FHA 203k 6.25% into a Fixed Rate Interest only mortgage till interest rates come down near or below 5%. Ive been search online for Interest only "Landlord" mortgages, but Im not seeing any available interest only products out there. Ive ready about 10 year Interest only / 20 year Fixed Amortized products, but Im not seeing any products ready to apply for. Where should I be looking?