All Forum Posts by: Account Closed

@Dave Fagundes

@Dave Fagundes Just my thoughts on inner loop properties, the rent has been climbing since last year. 

Class B inventories is getting lower and lower in montrose especially where teachers, bartenders and entry level analysts are either squeezed out or pushed to pay mid rise or new complexes with 2-2.5 /sqft. 

I currently own 28 units around montrose and I am averaging around 1.69  /sqft with very low turn over. I am planning to slowly increasing rent this year as the Houston rental market has been stronger. 

Hi all,

I bought a 4plex for house hacking back in feb 18 with conventional 25% down. Currently, I found an another home where I am looking to get a FHA loan with 5% down. I do not currently have FHA loan or had one before. Is it possible to get one?

@Darren Quigley I have questions regarding cost segregation. 

1. Let's say property tax accessed land value is 1.5m and building is only 350k. Does the cost segregation make sense?

2. When doing the cost segregation, do I have to use the tax accessed value or purchase price? 

@Faysal Alam I started out house hacking with leveraging FHA loan. If you have 15k, you could buy up to 300k apartment. I am not very certain what you could get with 300k in NYC though. With 95% LTV and power of FHA, if you save up around 50k, you could potentially get up to 700k (there is a upper limit for FHA loan though).

Once you get an apartment or property, do everything that you can to increase cash flow (airbnb, normal rental) etc. 

I had 3 jobs working from 6am to 11PM when I was 23, trying to save up for down payment. 

@Account Closed 

I would strongly suggest live close to your rentals if you are starting out. I think 2 hrs drive is okay. 

Once you gain more experience with rental business, it's okay to go further out. This is purely my opinion.

@Joseph Anderson I did my house hack almost a year ago in Montrose. What I quickly realized with FHA is that although there is very low down payment, the mortgage insurance cost will eat your cash flow. It is optimal to do 20-25% for 4 plexes in order to see DCR above 1.4. Since the market is overheated and everyone is chasing for yield, it's extremely important to be careful with your underwriting process and don't jump in without enough cushion.

I bought 4 plex in the mid 600s and spent about 10k for cosmetic fixing. I was lucky enough to find 2b2bs 4 plex which allows me to cash flow around 6.5k a month. I am not very familiar with 3rd ward area but I have been seeing prices going higher and higher to Montrose level which does not make sense at all. 

@Dave Fagundes I completely agree with you with conventional buy and hold to reduce the rate and cost of the loan.

PM me if you have any more questions. Happy to network and answer questions. 

@Joe Splitrock When looking at cycles, employment is one of the indicators but not fully. You will also have to take into account of interest rate in US and around the world as well. During 80s, we are facing fed rate about 10% and mortgage about 15%. 

In the mean time, in US, we have fed that knows much better on how to protect the downturn than a decade ago. I am not saying that there won't be a downturn but it will be more of a correction than a bear market. 

You definitely cannot wait in the anticipation of downturns. If the deal is cash flowing and value added, I would go for it. Of course, these days, it's becoming harder and harder to find those such deals given all foreign investments and all. 

@Account Closed In my opinion, going for condos is risk itself alone before starting to talking about buying condos just for appreciation. There are thousands of people burnt in 07 with condos. 

If you like appreciation with negative cash flow, look into some hip area like Austin.

@Alex Silang

There are numerous studies showing that annual income over 90k has the diminishing returns on happiness. However, I find myself working harder and harder to achieve one goal. Be independent and do whatever the hack I want next day. 

If that means going to work 9-5, you should work hard to get to that stage. For me, my goal is not to worry about money for at least 6-10 years given that I have enough reserve to be able to live off, travel, and take care of my family. 

@Alec McGinn

It's a matter of risk vs return to my perspective. The more rehab works that you have to do, the riskier the project. The risk can come from various factors such as running out of money, going over time, underestimated problems, and unforeseen drainage problem. 

When you put your money to immediate cash flow properties, you will be paying a bit more just because of less risk. 

Please let me know what you think.