All Forum Posts by: Victor Padilla

So, early October my wife and I purchased our first four unit property. We are house hacking. Two of the four units are occupied by us, mostly so we can renovate them and the other two units are rented out. We'd like to update those two units as well, but it is what it is. We purchased the property using my VA loan, zero money down. We paid a few thousand in closing costs, but that's pretty much it. The VA appraiser appraised the property for approximately $30,000 more than we paid for it. Six months from now, I would like to do some sort of cash out refinance to help fund the down payment for the next property.

Here's the skinny. We currently live in Southern California, but it is possible next summer, a few months after our six months (seasoning) is complete, We could be relocating to Texas for work (federal employee). Should I try to do a VA cash out refinance? Or can I refinance out of the VA loan into an FHA or conventional loan with a cash out option if the equity has increased on the property due to the improvements we've made, and the original appraisal, which I stated was $30,000 more than we paid for the property? What if I do a VA cash out refinance in April or May, and then in August I get my orders to Texas? Will that cause any issues with the (possible) new lender? I'm pretty confused on what makes the most sense. Please advise.

I'm just wondering the best way to go about getting the equity to use for the second purchase. I've also heard some people talk about a HELOC. Anything I should no about a HELOC, especially if it's on a property that I could be leaving a few months later?

Thanks in advance!

@Nathan G.

Thank you Nathan for your advice.

So, my wife and I just purchased our first multi-family property in El Centro, CA. It is a four unit property, with each unit having two beds and one bath. Each unit also has stackable washer and dryer‘s. Each tenant is currently paying $700 a month, on a month-to-month basis. That is what the previous owner had set up. One tenant has lived there for three years, and the other for close to 15 years. I have no idea how long they have been paying $700. I live in one unit, and my twin sons who are seniors in high school are in the other unit. So just to be clear two of the units have tenants, and my family is occupying the other two units. House hacking.

We are currently in the process of renovating each of the units we are occupying, to include LVP flooring, recessed lighting, new paint, trim, etc. We are also going to add a tall wooden fence to provide privacy to our tenants from the other property.

We have been doing some research on the rents of similar properties/units in the area and it seems to me that the going rate for two bed one bath in the area is between $750-1100. There is a new four unit three minutes away that has less amenities than our property and they are asking $850. They don’t have washer and dryers (or hookups), our property does, we also have a small front area with grass the tenants can let their kids play in, etc. 

When both of our units are finished with the rehab, we plan on charging $900 a month to the new tenants, but what should I do about the other units with the tenants in them? Granted those units are in really good condition, but Won’t be as updated as the ones we are working in now, even still, I think that their current rent is far below the going market rate. And just to reiterate, they are currently on a month-to-month leasing agreement from the previous owner. How should I increase the rent to $800 or 850 if they are currently only paying $700?

Thank you in advance for all of your comments and suggestions. I really do appreciate each and everyone of you.

@Scott Lennon

Section 8. Screen well, keep up on your property, and smile on the 1st of the month. Even during turmoil. At least that’s what I’m hearing.

@Steve Morris Thank you Steve!

@Mindy Jensen riding motorcycles with my wife!

Closing on a property in the coming weeks and could use some advice on drafting up a solid rental agreement for future tenants. This is our first investment property,  and really want to put a contract together that protects my wife and I, and is fair/clear to the tenants.

The property is in El Centro, CA. Imperial county. 4-unit. My advice is helpful. I’ve been looking at a few online, but really wanted to consider all of your insights.

Thanks, Vic