All Forum Posts by: Felipe Salgado

Good afternoon BiggerPockets Community!

I need help! If anyone can pitch in and throw in some advice that would be amazing. I appreciate any and all feedback.

I bought a home December of 2017 with the intention of living in it while I upgrade the property.

The property is a 3 bedroom 2 bath in Santa Ana, CA. There is also a garage that I turned into a full working studio. This is currently renting for $1200. I'm also renting out 2 bedrooms in the main house and live in the 3rd bedroom. Originally I bought the house for $475,000 which I believe to be below market price. My strategy going into this was to rehab and then using the cash-out refinance strategy to take what I can to invest in a multifamily property in an area where it is not as expensive. I do not want to sell the current property as I would like the rental income that will come from this. I've seen areas that have lots of potential and narrowing down where I'd like to move to next. I would like to have all this done by July or August of 2020. If that is not do-able then by the end of the year latest!

At the moment - I don't have all the funds available to throw in to get everything done. I have about 2k in extra income every month that I use to renovate what I can and so far everything has been going well. I was able to get the kitchen remodel financed through a friend who's helped my family remodel in the past. The owner and I have agreed on a payment plan with no interest or credit check and a set monthly payment which I will be able to pay off within 4 months. I have 2 bathrooms I need to get done. The first bathroom needs a complete surface change which will cost me about 6k. The other bathroom is one that I would like to expand in square footage to make a full bathroom. Right now it is considered a (1.75). Estimated cost would be about 25k.

Looking at comps around my area, I would say that the value of my house is anywhere from 530-550k without renovations taken into consideration. I've been in contact with the agent who helped me purchase the house and he is recommending me to cash out refinance now which would give me about 40-50k and lower my monthly payment to help cash flow. I'm debating on whether to cash out refinance now or wait until I can get all the renovations done. Biggest thing holding me back from renovation is all the upfront cash. All-in-all, I purchased this with the intention of remodeling and then using the cash-out refinance in hopes of being able to get anywhere from 80-130k to put into the next multifamily that I purchase. I've seen the area and this number seems very do-able. 

What should I do? Would it best to refinance now and take what I can or would it better to get all the renovations done now and refinance when it is all done. I'd like to put myself in a position to be able to purchase a multifamily property in Bakersfield or Texas. If anyone can share some insight that would be great. I know there's missing information but I can share that with you if you'd like. I was eager to get my foot in the door and now that I am there, I'm eager to get the ball rolling into buying my next property. I am a veteran and have not used my VA loan yet, this might help.

Thank you all for your time, I greatly appreciate the feedback.

Happy Investing!

@Kevin Phu

Thank you! I agree 100% percent. I'm going to check out that podcast but you bring up great points and it'll help me take a better look at my options. I'm going to look for SFR instead of a property with an HOA. I know that a lot owners pay the fee and see nothing from it. I'm looking more into the FHA 203k loan now that you both bring it up and I really feel like that would work a little better even if I have to put 3.5% down. That's manageable and I know it can help with the remodel as well.

My goal is to buy out of state and this first home will be short term. Once I move into my first home I will work to buy out of state and exactly for that reason, it's a lot cheaper and saving that 20% down payment would be easier also. I really appreciate you taking time to reply, I'm learning and growing but if you need a Veterans help, I'm more than happy to lend a hand or just listen and learn. Thanks again! 

Good luck out in Virginia! hope you find a great deal out there!

Felipe 

A fellow veteran.

Hi @Amanda Fallon,

Thank you! Okay thanks for mentioning that. Around the price I'm looking for that actually might be possible and a better option. I will do more research on that and see how I can manage to use that.  I want to make sure I pick a smart investment that can help me leverage a second investment.

Hi everybody,

I'm in the process of buying my first property and I'm looking for some advice or a little help from the BiggerPockets family. 

I'm using my VA loan and I'm looking to use this as an investment but at the same time this would be my primary residence, for now at least. I'm looking for a 3 bedroom house/condo/apartment. My brother and I are moving and bringing a friend with us. They would pay rent of course and that'll allow me to save some money for my next investment. My thing is, I'm buying a house in Orange County and as many of you know, it's an expensive market. With using the VA loan and looking at my situation, with your experience or with your knowledge, what kind of property should I be looking for? what would be the best option for a smart investment?

Right now, I'm looking for a property that can allow me to do some rehab but with the VA loan it can't be anything too crazy. I know when buying property I shouldn't rely to gain value through appreciation. Would it be smart to buy something already in good condition that doesn't really need rehab or should I still look for properties with some rehab work in Orange County. I have about 10-15k to start so I don't have a ton of money but I do have some and I know it's more than enough to start.

I appreciate this site and everybody who helps others make their dreams a reality and I'm looking to be one of those people. Thank you BP!

Hi Gabriel, 

is this still available?

please send me Texas to [email protected]

I am interested in the property. can you send me more information please. [email protected]

sent me details, I am interensted [email protected]

@Joe Homs

Thank you! I appreciate you reaching out and responding. I am very interested in getting started and this looks like a good opportunity. I work in Lake Forest and meeting on those Saturdays can be something I can make happen. 

I am interested in talking before hand if that's possible. It'll be good to hear from someone who has been in real estate for years. 

Hi BiggerPockets community!

My name is Felipe Salgado and I live in California within the Orange County area and I am looking to purchase my first investment. I have around 10k-15k saved up and have a steady income coming in allowing me to save at least 1-3k every month. My market is very expensive not to make excuses of course but for my first investment I am looking to buy rental property out of state. I am wanting to get out of my comfort zone and really look into investing in areas other than California. I have done research on what I would like to spend and the type of homes I would want to purchase. Currently I am looking at the market in Dallas, Texas or other big cities in Texas. My biggest question would be is what I would need and what I should look out for in I am wanting to take my investment out of state and how I can be better prepared. What is my next step? I have a market, I know what I want to spend and the properties I am interested in but I am a little stuck on what my next step is. It would be very helpful to find someone in that area that has had experience.

Thank you all!