All Forum Posts by: Zach Taylor

@Emily Shrub For a house hack I would not consider the ROI so much at the beginning. The purpose of this strategy is to eliminate or reduce your housing expense. If you can live in one side of a duplex, and the tenant on the other side pays enough rent to cover the mortgage each month, I would consider that a big win. Once you move out of the building and begin renting both sides out to tenants, you will begin to realize the cashflow.

@Sean Ross To qualify for commercial/portfolio lending products for future acquisitions. These lenders view and qualify the borrower based upon the performance & profitability of the assets they own. But I am unsure if these assets need to be held in an LLC instead of my personal name.

Agreed with @Matthew McKee. When I first started my out of state properties I tried to manage myself, and it was extremely difficult given the type of properties and tenants. Property manager is the single most important piece of the puzzle in my opinion. 

I am getting to the point where I will have to move from conventional loan products to commercial/portfolio loan products because of strict conventional guidelines and underwriting. My properties are SFR's, duplexes, and triplexes. For those with experience in these loan products, do all my properties need to be under the ownership of an LLC or other business entity to qualify for such loans? Or could the properties remain under my name? I am reaching out to lenders, but wanted to see about others' experiences. Thanks in advance.

@Anton Filiptsov If you want to house hack in an expensive market, you will not cash flow most of the time. However, you can still cover your mortgage and live there for free, which is basically the point of the strategy. After you have satisfied the FHA one-year occupancy requirement, you can move out and then the building becomes a cash-flowing property with tenants in all units. One way to get the most out of a single family house hack is to rent out each room to individual tenants. You could purchase a 5BD 3BA home and rent each room and it would probably produce much more income than simply buying a duplex and living in one side and renting out the other.

@Trenton Mattson Since you don't care about cashflow, I wonder if your home could attract rents at or above your mortgage as it stands now without any upgrades. If you are able to rent it out without adding any improvements to it, you could then leverage that equity in the form of a HELOC to purchase another property.

@Trevor J Dammon No they are similar term lengths to a purchase. 

I agree with @Chris Seveney Just having great liability insurance and the property in your name is a good option and can be easier. 

@Trevor J Dammon The equity you have in a property is the value of the property minus your debt on the property. In your example after the appreciation, the home is worth $573k and you owe $453k. So that leaves you with 21% equity. 

When you refinance you are getting a new loan, paying off the first loan, and keeping the difference between the two. When you refinance the property the new lender often times will lend at an LTV of 80%. That means that they would loan you 80% of $573k = $458k. But you owe $453k on your first mortgage which you still need to pay back, leaving you with only $5k. If this is an owner-occupied home, you may be able to obtain an LTV of 90%, which would leave you with much more in the case of a cashout.

@Adam A. @Chris Davis @Caroline Gerardo @Matt Devincenzo

I started the loan process with PenFed for a HELOC on a NOO duplex in March of this year and closed on it in May. Maybe call them back or PM me and I can guide you to the loan manager I worked with.