All Forum Posts by: Tyler Jordison

Hi y'all, 

I am looking for advice on my next step regarding financing to acquire my next property. Here is my conundrum: 

I have a duplex that I house hacked back in 2018. Current estimated value is 315K. Mortgage balance is $166K. Loan is an FHA loan at 4.25% and I am of course still paying that PMI.

Through my current loan servicer I can do a cashout refi and get around $55k equity out of the property, which I would use to by my next duplex. The new loan would be 30 years at around 8.15% interest but of course not have PMI (also no fees, points, etc since they are incentivizing me to refi with them as my current servicer). Although cashlow does take a hit I will still be able to make a decent amount per month (~$400/500).

My biggest blocker to doing more deals in financing, which is why I'm taking a look at this option. 

My questions: 

Is this something you would consider? 

What are some pitfalls  I'm not thinking of that I should consider? 

Is this even a good deal or should I keep looking for more cashout refi options? 

Thanks! 

@Ryan Landis That's great insight, thank you! 

@Tim Johnson Gotcha - and yes sir, my buddy would be the GC for the entire project. Why would that allow 5% down? 

Thanks so much! 

@Ryan Landis The goal is a little bit of both, build it for ourselves to live in for a few years, sell after at least 2 years to get tax exception on capital gains. Other goal, is to learn about the building process from the ground up to get larger multi building (long story short working with somebody that knows much more about building than me that I will lean on in the whole process). 

Looking for any and all ideas on best practices to finance buying land (without a builder attached) and then “being my own builder” to build a single family house on. Would I have to handle the land purchase separate than the loan I would need to actually build the house? Creative ways to finance that have worked for you?

Thanks!

@Derek Dombeck Thanks for the great insight and multiple options. I think taking what I have to finish the 1 side 1st and refinancing in 6 months is a really solid option. In this senario I would be able to refi out my monthly PMI sooner as well, two birds one stone.

@Bob Okenwa Thanks for the response Bob, I have heard of many other investors utilize 0% credit cards effectively for rehabs, and I do like that idea, I just have to make sure I have a solid plan to pay them off, like you said. I will have to look into the FHA 203K loan as well, thanks again!

Hi everybody, 

I just got my first duplex under contract and will be financing it FHA 3.5% owner occupied, so a little good old fashioned house hacking. I have got all the cash I need for the down payment, all closing costs and everything that goes with that, and then probably another 8K-10K for renovations. The property needs a fair bit of work both inside and out, but nothing major (all mechanicals are within 2 years new thankfully). We would like to fully finish the basement on our side of the duplex and "partial" finish the basement on the occupied side. The super nice thing is that both sides are fully plumbed for a bathroom and are completely dry walled, the occupied side even has a fully finished BEDROOM that isn't being counted because they don't have an egress window down there! 

Anyways - I have estimated the rehab to cost around 20K-22K when all said and done so I was wondering, what is the best way to finance that extra, lets say, 12K? Should I get a construction loan... or just make my home loan 12K more than what I bought it for and use that (if this is even possible?).... or some other more creative way all together? 

I would love to know what you all think, and how you have done it yourself in the past. Thanks so much!  

Hello All, 

My wife and I just got our first duplex under contract and intend on house hacking it. The side we wont be living in currently has a month to month lease. When we close and take possession we will be requiring they sign a one year lease if they would like to stay (they've lived there for 12 years so I am not too worried that they'll put up a huge fuss). My question is... with a month to month lease, do I have to "serve notice" that I wont be renewing their current lease (because obviously I will have my own) and give them 30 days (according to their current lease) before I can introduce my own lease...? If it was a 6 month lease or year lease that they were currently in, I would obviously just ask them to sign my lease at the expiration of the current one but for month to month I am not so sure. 

It is probably a super obvious answer but like I said, this is the first time we've ever been landlords so we're just learning as we go! 

Thanks all, 

***UPDATE***

Is this still a good deal...? In negotiation it is now known that I will not get this property for less than mid 220s, so I ran the report again. Do you all still think this is a good deal? 

https://www.biggerpockets.com/calculators/shared/1...

Nice neighborhood, all appliances are new and come with (including two sets of washer and driers). There is room to put in sweat equity in the unfinished basements in both units. (and if I am feeling really ambitious, and it makes financial sense, there is room to build a detached garage, where there currently is none. 

In the report - I have closing costs at $500 because I am asking for $2,500 in seller assistance in closing costs. 

I feel safe this property will have a nice 2% minimum appreciation, but it is not cash flowing as much as I would initially like. 

I would appreciate all the insight and opinions, thanks so much! 

@John Place We do intend to house hack this property. I guess I didn't think about that avenue, I will definitely have to look into that, thank you! 

@Andrew Kerr will do, fingers crossed we can be competitive on it with the market being so hot right now for multi's, especially around Iowa. 

@Andrew Kerr - The property is actually in great condition, with newer roof and other big ticket items. It's actually almost too nice, as we were looking to put our own sweat equity into it. But there is opportunity to finish the basement and add a third bedroom so that is appealing to us in the "sweat equity department". That is why I set 5% for capex and maintenance. As for property management, I think in the future when we get to a point of not wanting to manage it anymore, my plan would be to 1031 exchange into something bigger, like a 8-12 unit building and then budget to have that managed. That is the long term game eventually - more doors, less roofs ha. 

My wife and I are currently paying $1,150 per month for rent plus all utilities (except cable and internet). So off loading that financial burden is a big deal for us.  We don't plan on renting after this leasing period is up in July. 

Thanks Andrew for the feedback, I appreciate it!