All Forum Posts by: Russ Eisenberg

@Josiah Sia - Did you end up going forward with this deal? Wondering how the mixed LTR/STR model has worked for you. I am considering doing the same. Thanks for any learnings.

Russ

@Palmer Thomas - What did you end up doing?  I am thinking about doing the same thing as I would like to use the downstairs unit when I am in town.  The house is about 5 hours from my primary.

-Russ

I am likely going to be in this situation next year.  @Shyd Coloma - It would be great if you would be willing to share what you learn.

Also, do you have any conflict between the sides?  I am a little concerned about the mixed model, but for our needs it would be ideal. 

Thanks,

Russ

@Mitchell R Fiecke - Can I ask what you ended up doing and how it worked?   Have you made adjustments?  I am in the exact same boat and will be ready to rent in March.  Any advice from your experience is welcome. 

-Russ

And congrats on getting going!!!!

Is this a house hack?  Very first thing that jumped out me was a 4% loan with 5% down and no points.  Are you planning to refi to pay off the rehab or are you looking to get a partner to cover that and leave that money in theu deal?  If so, what is your intended deal structure?  What is your revenue plan? 

@Rick Albert - I think that your idea of move out of a primary works if you are planning to house hack.  Otherwise it may be that you simply could not afford to move into a house of equal stature unless you are fully relocating without a reduction in income.  To be honest, if I had to buy my house with 3.5% - 5% down, I couldn't afford it, probably not even with the cashflow from my current primary.  And if I could, then I would be putting my appreciation at a risk of capital gains if I don't maintain it as primary for 2 of the last 5 years or 1031 exchange should/when I decide to sell. 

I can give you a referral.  Are you local?  You need to watch them/check the work, but they show up on time, have good pricing, and never push back when I say that something needs to be changed/updated/fixed.  Shoot me a dm if you want details.  Also, just happy to connect as I am in PDX as well.

Russ  

One other thing. From an asset protection standpoint your HELOC will be secured by the property that it is taken out on, not the one that you bought with it, so if you can't pay the HELOC you do put that secured asset at risk. Where with a hard money loan (which I have not done, so don't quote me) I believe that you are securing it with the new asset so it is less risk to your original house.

I went option 1. I wanted lower costs during the rehab period and my HELOC allows for interest only. I can swing the full purchase and rehab on my HELOC, and I have a 0% 15 month CC for anything that I can charge to keep interest a little lower. I understand the value to going purchase via traditional, and then refi (my lender does no cost refi) so I may go that route in the future. We shall see....

My main reason for this route was because I needed to do a cash purchase on this particular property and doing an immediate cash out refi didn't really make a lot of sense to me.  I figured I would just do it post rehab since I would be getting those rates in the end anyway.  This let me keep my "extra costs" beyond just my purchase offer to only $502 for the property.