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Updated almost 4 years ago,
House Hacking Question - I'm not handy
Hello Everyone,
I've decided after much thinking and asking around to other investors what the pros and cons are to buy in Los Angeles where I live.
I have enough for 20 % down on a 700k house and I am planning to house hack with room mates.
Some facts about me.
1. I am not handy at all. I'm a dumb *** when it comes to fixing pretty much anything except cereal lol .
2. I am good or better than average I should say at getting quotes and negotiating. I have no problem cold contacting contractors and figuring out costs etc.
3. My current rent is 1450 a month if I include utilities and WiFi it would be about 1650.
4. If I can get a property 30 to 45 mins depending on traffic outside of downtown Los Angeles. I think 700k purchase price is doable.
5. I am planning to get a 4 bedroom / 2 bathroom house with a possible detached or attached ADU so I can get more cashflow in the future.
6. My PITI will come out to roughly 3600 a month including utilities.
7. For a bigger bedroom in the areas I am looking at I think the rents will breakdown as listed below:
*** Side note I am preapproved and qualify for a little higher than this without any issues. *** according to 2 different lenders.
Bd 1 : 1000
Bd 2 : 1000
Bd 3 : 700 ( smaller bedrooms) In this area it seems like there are mostly 2 bigger bedrooms and 2 smaller bedrooms in the areas I have been walking and looking at.
Bd 4 : my bedroom ( remainder of mortgage )
So: 3600 - 2700 = 900 this would decrease my rent by 1650 my current apt rent - 900 new rent I would pay myself to live in one of the smaller rooms=900.
I pumped some numbers to be conservative. I am prepared to pay 1400 to 2000 a month if needed.And I have some reserves for the mortgage for about 6 months of total mortgage to be safe.
My question is :
1. Is this is a good first deal as my total all in would be about 170K.
2. Should I buy a fixer and try to manage contractors for my first buy and force appreciation and delay ( room rental income ) or should since I am not handy , should I buy something turn key?
3. Is there anything about this that I am not seeing or thinking about ( i.e. potential pitfalls, unseen expenses etc ).
Thank you,
Alex