Some Questions for a Newbie

[Jeremy McVicar]

Greetings,

My name is Jeremy. My wife and I love the Bigger Pockets forums and have enjoyed three of Brandon Turner’s books – although we are not finished just yet. I am excited about property investing and am in the education phase of all this. Ok – straight to the point here. I have the following questions I’ve been pondering for a couple weeks now. Any input would be greatly appreciated.

Capital Expenditures (CAP EX)

I estimated CAP EX at $200.00 per month for a single family residence investment. When applying the same principles calculating Cap Ex to a four-plex, do I then need to times this amount by four (with the exception of expenses such as drive way, roof)? If so, I haven't got this to work for me whereas the numbers end on a positive profit. Is there another method to calculating CAP EX for multi-unit properties?

Borrowing Funds

I intend to house-hack a multi-unit as my first investment. I figured I'd buy my first multi-unit with a FHA loan to secure the lowest down payment and have some funds left over for unforeseen expenses or improvements. Two years after this, (or less if its an option) I want to buy another property. Do you know from your time doing this, will lenders allow me to use my VA loan or do a conventional loan while I have an existing FHA loan out there?

House Hacking Numbers

I’m doing a scenario for a four plex and house hacking. When I live in one, my per unit (per door) profit after all expenses is $72.00. Is this acceptable to those of you who would house hack and live in one of your four plex units or do you still shoot for $100.00 and higher. 

To House Hack or NOT

a. I am thinking on either house hacking or deciding if I want to put all the funds down to secure a conventional loan and continue to live in my rental unit (not the investment property). If you had the money, what would you do and why?

b. Would they let me take a conventional loan on a multi-plex if I'm not going to live in it? 

Tax Write-Offs and Borrowing future Funds

After I write off expenses on my first investment property, I may write off more than I made in my investment property for that year. Would that hurt my ability to borrow again for another investment property if I make good money in my full time career?

Thank you so much to those of you who might be able to answer some of these questions. 

Sincerely, 

Jeremy McVicar