All Forum Posts by: Tom Romanowski

Thanks @Greg Scott for the response!

Hi BiggerPockets community! I was hoping to get some advice on a duplex I'm looking at. The property is located in a class C neighborhood and is next to a bar. The community, crime statistics, unemployment rates, vacancy rates, and access to the city are good. Schools are okay. My only concern is that the property was sold for $90k in 2018 and is now being listed for $270k after renovations. The property next to it was just tax assessed in 2021 at $177k. I've calculated a coc rate of 15.7% and cap rate of 6.8% if I bought it at $235k but I still feel like I would be overpaying based on the values of the properties around it. I'm planning to buy and hold, but I want to make sure I get a ROI when I eventually sell it. Does this seem like a good or bad deal to others?

I appreciate all feedback. Thanks all.

Thanks @Carlos M., that's exactly what I was thinking with the 10%, but 3.5% makes a lot more sense given that I plan on refinancing and I don't have to save as long.

Thanks @John Leake!

@John Leake I haven't considered how the renovations would affect my equity. So, hypothetically, if I put 10% down on $100,000, renovated to increase its value to $150,000, I would technically have 40% equity in the property (excluding the principal I've paid off) meaning I wouldn't have to pay the mortgage insurance on a conventional loan?

John and @Ashley Cross, thank you both for the responses. I'll look into the monthly payments with the 3.5% down.

Hey BP Community! I'm just starting out my real estate investment journey and am planning to do my first house-hack this year with a duplex. I wanted to get your opinions on which loan strategy should I pursue:

Strategy 1: Put down 10% on an FHA loan, make some renovations, continue saving, look out for another good deal in the meantime and use remaining 10% that I would've put down plus some additional reserves on a second property. I would eventually refinance the FHA into a conventional once I've gathered 20% equity to get rid of the mortgage insurance.

Strategy 2: Put down 20% on a conventional loan, make some renovations, continue saving until I've made enough to purchase another property.

I'd be happy to hear any other feedback as well. Thank you all!