All Forum Posts by: William Sing

Hey there! 

I'd take a look at the level of renovation you'll need from other rentals around you. Using more neutral colors like grey and beige seems to be all the rage lately. 

How much you put into the renovations will primarily be based on what you want to outsource and the grade of materials you are looking for. I'd look at Ikea for cabinets. They are pretty good quality and lay on rails so they can be swapped out. If you are not looking at laminate (which has gotten a lot better) then look into engineered stone. Quartz and Granit are good but doesn't always have the best durability. I'd just get appliances from good brands from whirlpool etc. 

Hope that helps!

That is true! Check out DIY renovision a youtube channel. They have some great stuff about doing basements and might give you a better idea :)

Nice job getting halfway there!

As for land deals not being as troublesome, I'm not so sure about that. Usually, builders/developers do A LOT more due diligence on these properties at least here in Portland, OR. You are right in the sense that most SFH buyers usually have less cash and the finance side can be a bit less of a pain vs developers who just pay the cash needed.

I would nail down what you want to do and what your talents are. You can buy/sell a lot more SFH buyers than land deals and land deals can sit on the market for a Long time. I think you'd need to develop the relationships needed to make the land deal an option and also have to understand the rules and regulations for building/developing. I'd reach out to the local HBA as well if you have one to start developing those relationships. You will need to think of the land specialization as a long-term plan of 5+ years.

Many of them will do HELOCs on the primary as you said and usually up to 80-85% LTV. With Investment properties, they are usually a bit harder to find lenders for. Sometimes local credit unions help with that but you can usually only get 70-75% LTV on them. I had to call about 8-10 lenders to find the Investment Property HELOC. I'd also recommend going to the local REIA and seeing if anyone knows any lenders that could help you out.

I think the 203k loan would be a good option. You can't do a lot of the work since you need a licensed contractor to do it, but make sure you find a lender who HAS done these. The big thing with these is that the ARV needs to be there for the work you are doing. These typically have longer closes as well. I would find a lender first to look at what can be done. You can do hard money but just know you will need a lot for the DP and pay for points up front with a very high-interest rate. As a first-time buyer you take on a lot less risk when you have a 203k loan in my opinion since there are so many fail safes in the process.

First off, that is a good start!

I would be careful about saying "below market value" and more look at what the numbers would be. If there is a home that needs a lot of work but is above "market value" you can still have the potential to negotiate and make the numbers work for you. 

That leads me to the second point. What do you want your returns to be? Are you looking for X amount in cash flow or don't care about appreciation rates? Make sure to check with agents/wholesalers about what is common in the market for those numbers because if you make them crazy it doesn't work. For example, getting $1000/door in Portland w/ an FHA loan in the first year is most likely not going to happen.

The third would be location. Usually, people like to stay in specific counties or zip codes. This usually helps when plugging in searches as well. 

Just to give an example, I'm looking for a house hack (2-4 units) opportunity in X zip code that will cashflow in 1 year and provides a value add opportunity either by raising rents or fixing up the property. I'm looking to put about 30k in renovations at max. 

Hope that helps! 

Hey Rodrigo, 

This is very possible. You would need to create an LLC and have the private investors be silent partners essentially. I'd have an operations agreement as well to go along with this so talking to a lawyer to set up everything would be good as well.

I'm a bit curious though, why not just pool together the money as a loan and then refinance and cash out the investors? This way it stays in your name and you don't have to deal with paying out the profit on future rents. I usually find this deal better since they can be put in 2nd position lien on the home. 

Hope this helps!

I think this depends on what you are wanting to do. If you are trying to maximize cash flow on that specific property it would probably help, but you could probably put that money towards another property. Separating it out might be easier but watch out for SDC fees, especially for the waterline. I'd pencil out each option and see which one would be better financially, time-wise, and effort-wise. 

Agreed!

Check out the FRED - https://fred.stlouisfed.org/se... You can look up info on your area and also take a look at Redfin - They have a lot of great info as well. https://www.redfin.com/news/da...