All Forum Posts by: David Shapiro

I'm on my third house hack. I bought the first one 9 years ago so they're pretty spread out. 

From my experience the reason is the most important part. You need to be able to justify to the underwriter why this move makes sense. E.g. moving closer to work, larger house because you need more space, better school district for your kids.

The lender may ask you to have a lease in place for your current residence before they'll qualify you for the new residence (if you're income is enough to cover both then that may not be necessary).

The regulations seem to be constantly changing so ask your mortgage guy... but last I did this investment property number 5 becomes more stringent under FNMA guidelines. However, if number 5 is owner occupied it's pretty standard.

I don't think you need to do any subleasing or month-to-month with the father. Having him as an additional occupant is one option.

If you don't have any other applicants, you want to get it rented right away, and you don't want to risk losing this potential tenant then if the son qualifies on his own I think it's fine to put the father as an additional occupant.

The preferred method is having them both as tenants so you can hold them both accountable for rent and/or damages.

You could say you require all parties 18+ to be on the lease as tenants. Maybe somebody with CA law knowledge can weigh in on that.

Is the father only going to live there for a couple months and then is moving somewhere else full-time?

Hi Ezra, I'll answer the two of these that match my expertise...

2. If you have a solid deal... and with the rates the lenders are quoting you the numbers still meet your criteria then I say go for it. Likely that you won't get your first deal in the first 30 or even 60 days anyways so work on your credit while you evaluate deals. Once you do get a loan that will further improve your credit (assuming you pay it on time each month).

3. Depends on your strategy. IMO with rates still low it's crazy not to leverage. Buy four deals with 25% down rather than one all cash. Lock in low fixed-rate 30 year mortgages and let inflation erode your debt over the next 30 years. If you're hoarding cash you don't want inflation. The opposite of that is if you have debt inflation is good.

Good luck!

Are you referring to calling sellers on expired listings?

I love that it started with you pulling over and striking up a conversation. Great job!

@Erik Trefzger I'm in a similar situation, thanks for break down of your research.

Save your money on the attorney and get your first deal done. You've done some good research... the best way to get started and learn at an exponentially greater rate is to jump in with both feet. If you feel uncomfortable or nervous about it, everybody does at first, it means you're growing. Have fun!

Congrats on your first deal. Sounds like you have a pretty good plan. How are you covering your living expenses? I would say try to pump all of your real estate earnings back into it to accelerate your growth.

I've never heard cap rate used after debt service. As you noted cap rate is based on NOI which doesn't include debt service. An easy explanation of cap rate is the return if you purchase all cash. If you want to include debt service my preferred metrics are cash-on-cash return or IRR.

Wow. If it were a rental, my understanding is that the landlord would have to fix it because they provided it initially (unless maybe if it was stated in the lease that maintaining the CAC is the tenants responsibility).