All Forum Posts by: Samuel Choi

There's a monthly Northern Virginia RE meetup at Tysons Corner:https://www.facebook.com/group...

Hi, I'm interested in pursuing a Fannie Mae Homestyle renovation loan and am looking for lenders. Any recommendations would be greatly appreciated!

I know that you can look up 203k lenders on the HUD endorsement summary but hadn't seen anything similar for Homestyle lenders.

Also, if anyone has experience with this loan and would be open to share their experience, let's connect!

@Lane Kawaoka, any specific reason why you wouldn't recommend it for anyone with net worth under 500k? I'm not at that level (yet), but thought the ability to "double dip" if you can find high returns in real estate/elsewhere would benefit most people? Is it just the higher risk/cost of the policy lapsing per @Michael Redden's point? Any thoughts/recommendations would be welcome!

@Thomas Rutkowski I did a quick Google search on cash value line of credits and many of them have a minimum credit line amount ($65,000-$100,000). Even when overfunding, I won't have that amount of cash value for awhile. Are you aware of any banks/credit unions/etc. that offer cash value line of credits with a lower minimum? 

Thanks so much for all your help!

@Thomas Rutkowski Thanks for the very informative reply! I've dug through the various forums you referenced and I found it very helpful and more accurate than some of the "marketing" pitches I've seen on IBC videos/materials.

It sounds like in terms of long-term returns, Indexed Universal Life > Whole Life. I'd also be curious to know why you recommend variable interest rates on policy loans.

I actually got my health exam/physical and illustration (whole life) but haven't pulled the trigger yet. I signed up for the FB group so looking forward to learning more!

I recently listened to the Millennial Money Podcast where Chris Naugle talks about using a specific type of life insurance policy to "become your own bank" and build a foundation for wealthy building.

The idea is that you are able to take a loan out for 90% of your premiums. The loan comes out of the life insurance company's general account at 5% simple interest (paid annually) and technically you don't have to pay it back as it will be taken off your death benefit. The cash value in your policy continues to compound at 5.6%-6% (4% guaranteed, 1%-2% dividends) for the full amount. It's like an appreciating HELOC?

Just wanted to post and see if anything is familiar with the concept or have used it for real estate investing (i.e. hard money lending, down payments, etc.). I probably didn't explain it thoroughly and welcome any questions/critiques.

I have a dumb question about Section 8. Everyone says that screening Section 8 tenants is one of the most crucial steps. But how can you reject a Section 8 tenant's application without violating the Equal Credit Opportunity Act?

This is amazing! Full disclosure, I'm a new investor so take my comments with a grain of salt.

I'd make a website to showcase your portfolio (before/after pics w/ ROI analysis; case study/success stories). I googled "renovation consultant" and it was mostly outdated sites/services, so definitely an opportunity to create your own category! Or you can market as an "interior designer for investors."

I'd recommend a fee just for simplicity when starting off. Excited to see where your idea goes and hopefully I can get to a place where I can work with you in the future!

Final Update:

I have 2 tenants under lease and 1 in-process, total rental income will be 2,450/mo which almost covers PITI of 2,650. My total monthly payment will be ~3,400 (utilities/vacancy/repairs/CapEx). I included utilities and a monthly cleaning service to make it an attractive listing (and hopefully lessen maintenance costs by keeping the living areas/bathrooms clean).

Lessons Learned:

1. The house was built in 2001, so I bought it right at the end of life for roof + HVAC. Basically I front loaded all my CapEx (rookie mistake). Next time I'll look for houses that have roof/HVAC replaced recently and invest in a home inspection that includes septic check.

2. Found dead roaches!!! I panicked, but after calling the local pest services there was no outbreak. I scheduled quarterly treatments just to be safe, since roaches can go from house to house through shared walls (did not know that).

3. Furniture is very expensive (duh) but there are so many little expenses/repairs that add up so quickly, so will budget more cash reserves and build a relationship with a trusty/affordable handyman.

Recommendations:

1. Maintenance: Any recommendations on local handymen, plumbers, electricians, etc. would be appreciated! Just been using Yelp/Google/Thumbtack reviews as an indicator for now.

2. Property Management Software: I'm currently using apartments.com (since cozy.co transitioned there) but it doesn't include maintenance requests. Wondering if anyone had one they used that they wanted to highly recommend (i.e. TenantCloud, Buildium).

3. Rent by Room: Just curious, are there property management companies that specialize in rent by the room tenants in any market? 

Next Steps:

My next step is to start exploring long distance real estate opportunities. I'm interested in Fort Worth, TX and have started digging through the BP forums. If anyone has a contact they would be willing to connect me with, that would be greatly appreciated!

Thank you all for the feedback/recommendations and hope everyone is staying safe/sane in these crazy times!

Quick update to start off the new year. I was able to close on a property! It hit most of my criteria (4 bed, 3 full bath, ample parking, metro-adjacent) so now working to get the place ready for potential tenants. 

PITI will be 2.65k/mo and hoping to rent out the rooms on the upper level for 2.2k-2.4k/mo. If you add vacancy/repairs/capex it'll be closer to 3.1k/mo, so when I move out I'm estimating that the basement unit can cover that spread. I'll update this forum again when I have "official" rental numbers to report (mostly for my own accountability).

Being a first time homeowner/house hacker I fluctuate wildly between excitement and terror but so grateful for the advice/support of the BP community!