All Forum Posts by: Sean Bozigian

Welcome to BP, Cory! Congrats on taking the first steps toward purchasing an investment property!

@Jonathan Bebey Your research is accurate as far as what I've seen from doing my own digging. My wife and I are looking for our next house hack this year as well and have a handful of out of the box strategies. I'm happy to discuss and brainstorm if you're interested!

@Darek Michnicz Welcome to the community. I work with a lot of investors and invest personally in the area. I'd be happy to answer any questions. Congrats on taking the first steps!

@Jake Jones hey Jake. Welcome to Spokane and congrats on your first deal. What part of town did you buy in?

My fiancé and I also purchased an owner-occupied duplex as our first property. Let’s get together and talk shop sometime.

Sean

Thanks, Dave. It's an owner occupied duplex and I've been working closely with my lender throughout the process to ensure my rate is locked in. 

Spokane Investors, 

I hope everyone is staying safe and healthy! There have been a lot of responses to this question on a national level, but i wanted to hear from investors in the Spokane area, specifically. Has your strategy changed at all in the past month+ ? Has your outlook on the Spokane market changed at all? Are you pumping the brakes on any current deals or continuing onward? How has rent collection been? Worried about any specific property or property type in your portfolio?

Personally, I am moving forward with a cash-out refinance on a duplex that I started at the beginning of March (appraisal has been delaaaayed). Further leveraging makes me slightly wary currently, but the added cash flow through the new rate and investing capital that I'm freeing up fits my overall strategy. Additionally, now more than ever, I'm looking to connect with local investors and build up my foundation to be ready to capitalize on future opportunities. So, if we have not had a chance to meet or chat before, let's connect (message, phone call, zoom coffee). 

Looking forward to seeing some responses on this topic!

Sean

My current and new loan will be 30 years. My original loan balance is ~$205,000. The $161 takes into account a fairly significant tax increase for 2020 as well.  

I think a lot of it depends on your goal and overall strategy. This type of strategy can do be very successful with STR. When my fiance and I travel, we're always drawn to the "unique" and "cool" units. With that being said, if it's something that you plan to do operate as a long-term rental, I wouldn't pigeon hole yourself and make it too unique. You want to make sure you at least have a balance and it appeals to a broader population.

Hi everyone, 

I've been kicking the tires on a cash-out refinance to continue to scale for quite some time. With the recent rate cuts, I decided to jump on it a bit earlier than anticipated. This is my first refi and I'm looking for some advice in helping evaluate this scenario. 

I purchased a duplex in December 2018 for $260,000 that I'm currently house hacking. Between market appreciation and forced appreciation (cosmetic rehab), my conservative estimate on the property is $310,000. My current interest rate is 5.25%.

I have the option to buy down the new rate to 3.625% and save $161 per month on my mortgage payment. The kicker is that closing costs would total close to $8,500, leaving me with roughly $15,000 cash back in pocket. I plan to use all of the cash to help fund my next cash-flowing property.

The break-even on the closing costs is 5 years when factoring in the mortgage savings. I have no plans on selling this property anytime in the foreseeable future, so when I look it at through that lens, it still makes sense. I have a lender that I trust and have worked with in the past and we've worked through a couple of different rate options and this appears to be the best value. However, I just have some speculation when it comes to the closing costs. I wanted to air this out and get some opinions. 

Thanks in advance!

Sean  

@Sam Bone hey Sam. Congrats on getting started and thinking creatively. As far as rent/room, that’s going to greatly depend on the area of town you’re looking in and the amenities included. A few things I would keep in mind as you evaluate this plan:

1) make sure you are accounting for all expenses as you evaluate properties (Vacancy, maintenance, Capex, etc). If you're looking at newer homes, maintenance and capex should hopefully be pretty minimal. However, With that many roommates/tenants, you're vacancy is almost certainly going to be higher. If you're using an FHA loan, you're most likely going to have to pay PMI as well.

2) There's some serious management when it comes to that many tenants and that much turnover. If you go the FHA route with a home priced at that level, you're going to take on a substantial amount of debt. I'd want to have a couple of thought out exit strategies if you end up not liking the roommate play or want to move on. A single family home priced at that level won't get close to cash flowing in Spokane.

Not trying to shoot down your idea, just playing devil’s advocate. I think it can be a great way of getting your feet wet, but just make sure you understand all of the expenses and the risks of that strategy. Best of luck!

Sean