All Forum Posts by: Sean Anderson

Thank you again for all the continued advice. I'm actually looking into other markets as I'm considering a move out of Orlando. To try and purchase my current or similar property  in my particular zip code as it sits, there's no way to cash flow. Rates are just too high and prices haven't settled, especially with all the new and future developments on my street. 

I wouldn't refi out, just second mortgage and pay off the equity agreement and funnel that cash to quality if need be, possibly some improvements.

Thank you! I'm looking into the DSCR option and keeping an eye out for discount multifamily. Seems my best bet would be to hopefully use future rental income to help qualify and find a property where I can add value. Then I at least have the option to fix and flip or keep.

I agree that letting my 3 percent rate go and paying up for the next property might not be the best idea. Plus, I’m in a prime location that is set to blow up. 

I also put a lot of time and effort into the ADU. It's very unique with a loft, custom clock window, vaulted, custom glass shower with walk away to outdoor shower, etc. looks like a clock tower!

I do hate the looming equity agreement I have in place. It's only like 35k at current appraisal, but I'd like to get it taken care of. So maybe a second mortgage or HELOC to settle it and move into second position. I'd have cash that way and wouldn't need to sell within the 10 yr contract period.

Thank you all. I agree that lack of income is probably holding me back the most. I plan on adding some sort of side gig or business here soon. I'm very much into the construction side as I've designed and pretty much built both properties with limited help. 

Unfortunately, my time is limited having a 14 month old I currently watch during the day. I work pretty much full time at night and on the ADU in my spare time, but the ADU is almost done which should fee up a good bit of time.

I should have about 225k in equity when finished so I've thought about going with your suggestions and selling to rehab/flip a larger property or multifamily. Problem is I would need a place to live while doing so with a family. 

I'm guesstimating but $525 ish sale price, minus 200k 1st mortage, 68k renovation loan, and 35k ish equity agreement. 

I read you can do up to 40 yrs with a DSCR loan which could keep my cash flow up and help me qualify with future value/rental income. Thoughts?

So I feel like I'm stuck and need advice on the best possible route. So I currently have (only real estate) a 2 bed one bath at 815 sq ft home that has been completely remodeled with a recently built a detached 405 sq ft loft style ADU in the back. I owe about $200k (1st mortgage) on the primary with a small equity agreement (second position) and a separate 68K 20 yr renovation loan to build the ADU. 3 percent rate on the 30 yr 1st mortgage, no payments on the equity agreement, and 8 percent on the 68K.

I'm looking to scale/upgrade to a larger home for a second property, but seems like no matter which way I look I'm at some sort of roadblock or disadvantage. I don't make enough to afford a second property without using future rental income and/or using equity. whatever money I borrow, It's expensive now with rates and I'd just be increasing my DTI.

I don't want to cash out refi with a 3 percent rate and increase my term and payments, I can't take a second mortgage without settling the equity agreement in second position, I can't do a heloc either without settling the equity agreement, and I'd rather not give up more equity as my ADU doesn't count when it comes to the equity sharing loan, in that I used the money to build and they don't count future improvements, only the property was which is my 815 sq ft home.

Rates and prices are so high and no matter what I get it will need improvements. I really can't afford any more than the $2k I'm spending all in on the property a month. FYI I will be making roughly $1500 cash flow pre expenses by renting out my home and the ADU if I move on. I can use that towards my new investment if they count it since I have no rental history/profits to show. So that puts me at about $3500-$4k max a month on the second property minus the 1500 rental income I'back to what I currently pay. If I buy a duplex, renting the second unit could help too, but I don't want to rely on that because I will need extra for repairs and other expenses should tenants not pay.

What would you do as a new investor with limited income?

 Hey Sam,

Sent you a DM btw. I think you're spot on regarding the $3400 gross income. Currently I at about $2000 current debt service on the existing mortgage and personal loan. The home equity agreement doesn't require monthly payments. If I refi and cancel out the HEA I'd probably be breaking even with the ADU as a long term rental. Def in the black as an STR.

I'm currently building a detached ADU in Orlando loft style as owner builder and I'm about 125k all in at the moment including a paver drive, covered deck, and complete septic upgrade.

Your quote is definitely high but not crazy so consider the owner builder route. 2nd stories  are always more expensive to frame and structurally your extisting footers/support walls will need reinforcement of some sort. 

As for the appraisal, square footage is square footage and should be relatively close to your primary? I’m not a realtor but given the fact that there will most likely be some sort of kitchenette, bathroom, washer/dryer, etc prices more like a duplex. Mine will.

If you need advice hit me up. 

So I was a bit naive with my first investment overspent. Bought a 815 sq ft 2/1 1950s in a great area back in 2017 (still primary home) with the idea of fixing it up. I went a bit overboard, but market helped and I’m sitting on about 120k plus in equity, but spent 70k on reno.

I refinanced during covid and took about 20k for my next project with hopes of building an ADU in the back.

I needed more capital so did a home equity agreement for another 25k and took out a personal loan/home renovation during covid 70k 20 yrs 7.5 percent.

I'm currently under construction and owner builder 400 sq ft loft style detached ADU which will be either an AirBNB or long term rental. 300 1st and 100 2nd. It was designed to resemble clock tower because I like doing different.

It’s costing about 125k to build  that includes upgraded septic system, paver drive, and covered deck patio. I’m estimating final appraisal at 450k + at 1220 sq ft or $368 a sq foot for both units.

Problem is I can access the equity without losing my 3 percent rate and can't HELOC because of the equity agreement in 2nd position.

I’m really creative and love building unique stuff. I’d like to get into another build of some sort (I’m not a GC) but with the current market and funds being tied up I’m stuck. I was thinking of renting both units and building a larger primary with a similar detached unit to offset the new mortgage as I’ve outgrown where I’m at. 

Any advice would be appreciated!