All Forum Posts by: Shayne Fee

As long as you know that you are paying the full retail price for a new home and are ok with that slim margin of safety then go for it. 

If you have the funds to buy that house and put down $200k+ you have a lot of options that I would consider to be safer investments.

Something along the lines of the worst house on the best street in the best neighborhood you can afford would be a smarter choice, but it comes with a lot of work that you don't have here. 

It's all a trade off. Sounds like you would be choosing one of the nicer single family homes in a multifamily area. Not usually the recipe for the greatest appreciation over time.

I'm not trying to be negative. Maybe this is the best fit for you and you've already considered all that I mentioned above. If it was me, I would find some great up and coming neighborhoods and look for a fixer.

5 years from now it's possible that we're in the trough of a recession. You might be in better shape if you bought something with a greater margin of safety built in and improved it efficiently.

Good luck and feel free to reach out if I can be of assistance in any way!

totally agree with @Jeff Dulla -- that re-leveraging your heloc into MF could be a great strategy. But I would just ask myself how much longer we have to run in this strong market...if we hit a downturn in the next couple years are you happy that you leveraged that money? If tenants and high rents are difficult to come by was it still a good decision?

I'm not saying it isn't. 'm saying these are the questions I'm asking myself right now as well!

yes, and no not really! But I have a 70k heloc  not 140...if the FED raises rates 6 more times (which I think we are still very very far away from) my payment would go up $87/month...it goes up about $14 or so every time they raise rates. Not sweating that at all. I have about 8 years left on the interest only payments and will either pay it off or down enough by the time that is up!

No -- I'm sorry -- reading my post again I can see how that was not clear! I decided to just stick with my original conventional loan and heloc because I didn't want to give up my 3.5% 30 year fixed first loan for a 4.875% rate...

My plan is long term buy and hold and these properties cash flow really well in historically high appreciation markets so I decided I don't want to mess with a good thing!

I may be kicking myself if/when we hit another big downturn but I don't see anything out there right now that looks more attractive. 

Hey @David Jenkins I have a very similar situation on one of my properties and have been looking at a refi as well. My original plan was long term buy and hold and I decided to stick with that and increase rents for greater cash flow. 

It just comes down to how risky/leveraged you want to be in this market. For me I decided I'll wait another year and build up reserves for another down payment as opposed to putting one of my properties in a weaker position cash flow wise...

Of course, my goals and motivations could be very different than yours. Just sharing my thought process and wish you the best of luck!

@Account Closed

Great to see another member from HB! I know much more about this area than Dallas but long term I would pick here for two reasons:

1) From what I understand, property taxes there are double to triple what you will see here. Over time that will eat into your profitability quite a bit.

2) Purely a guess -- but if you buy in the right areas I would say appreciation will be better long term here as well. LA is number 1 on the Case Shiller index for a reason. 

But I would definitely also factor in your personal preferences! Where do you want to live? Where do you have natural advantages or connections?

Good luck and feel free to reach out if I can help with anything!

There are plenty of good options for you here in Southern CA. 

I would look for a single family or small multi with value add potential in an up and coming neighborhood (of which there are many). 

You can use an FHA or low down payment conventional loan with an eye toward refinancing to get rid of your mortgage insurance.

I have done these types of deals personally and helped many clients do them as well. Good luck and feel free to reach out if you have any questions!

At first glance it seems simple enough to me -- let the husband go and evict (or cash for keys) the wife when she doesn't pay? I might not be considering all angles. But that seems like the path you will have to take. Are there better options you're considering?

I would still get the previous owner to deliver one unit vacant if you can and check if you're in a rent control area.

Also FHA loans have pretty strict rules regarding total rent needed to qualify and price limits. These can be challenging to meet in most desirable neighborhoods around LA...I have done a few of these FHA deals personally in the last few years. Feel free to message or email me if I can be of assistance!

get pre-qualified with a lender for your fha loan (you have to owner occupy to get an FHA loan). Have your offer contingent on the fact that the seller delivers the property with one vacant unit. I think that answers all your questions? Am I missing something?