House Hack Analysis - Dickinson, Texas/ Houston, Texas

[Christian Villanueva]

Hello, this is now my second analysis with a house hack, I'm needing a lot of help please. I've added my own mortgage calculation as I like to just plug in the value of the home and get the automatic change instead of having to come over to the BP Mortgage calculator to do so. The calculation comes with the same number so that's good. So what I'm needing hep on.. well multiple things. As I found out on my last analysis by a fellow BP member. Property taxes are 3% of my appraisal value... I gotta be honest I'm not entirely sure what that means but I've plugged that into my monthly taxes anyway. This eats up A LOT of these expenses. The home I'm analyzing now is 1235 Plantation Dr, Dickinson, Tx 77539 (Last time I tried to link to something it didn't work so I apologize if this one doesn't either) What I'll be looking for when I'm actually in the market is something cheaper (hopefully with built in equity) with a mother in law suite that I can live in while I rent out the main household. But just for analysis purposes and so you guys can hopefully help me we're going with this one. Here are my numbers I tried to link to my direct excel sheet last post but it wasn't working so I'm just going to copy and paste.

Property Type: Single Family 4 bed 3 Bathroom						Mortgage Calculation
Property Price	$ 180,000.00					Loan Amount	$ 173,700.00
Down Payment of 3.5%	$ 6,300.00					Interest Rate	5%
Loan	$ 173,700.00					Loan Length (years)	30
Rental Income	$ 1,500.00	Cash Flow				Payments per year	12
		Out of pocket	$ 1,172.46			Total number of payments	360
		Tenants Rent	$ 1,500.00			payment per period	$932.46
Monthly Expenses		Cash On Cash Return				Monthy Payment with Tax	$1,497.46
Taxes	$ 450.00	Down Payment	$ 6,300.00			sum of payments	$335,685.30
Insurance	$ 115.00	Closing Cost	$ 3,000.00			Interest Cost	$161,985.30
Electric	$ 100.00	Rehab Budget	$ 7,000.00
Water	$ 70.00	Total Investment	$ 16,300.00
Gas	$ 50.00
HOA	$ -
Lawn	$ 25.00
Vacancy	$ 100.00
Repairs	$ 50.00
Mortgage Insurance	$ 115.00
Capx	$ 100.00
Mortgage	$ 1,497.46
Total Monthly Expenses	$ 2,672.46

[James Stinnett]

@Christian Villanueva - Hi Christian, 

Well I can help with some of the above, but I'm not exactly sure on the following estimates you used:  Homeowners' Insurance - you used $115 -- that seems high but I'm in Los Angeles so that might be right for there;  Vacancy - you used $100 -- I would usually use 5% but again that would depend on what in the norm for that property type in that area so that may be right for there. 

I looked up the taxes and added them up and came up with a rate of 2.821909%, so that 3% estimate is very close, I got $423.29 so just about $27 less than your $450 per month.

The Lawn Care, Repairs, and Capx seem like they are in the right ballpark and same with the Electric, Water and Gas.

Now regarding the loan figures -- FHA charges Two Mortgage Insurance fees on each loan;
Up Front Mortgage Insurance Premium (UFMIP) and Annual Mortgage Insurance (MIP) paid monthly.

At a $180,000 purchase price your Base Loan amount is $173,700 (.965 x $180,000) which you have, but your Total Loan amount, which includes the UFMIP would be $176,739.75. This is calculated by taking the Base Loan amount of $173,700 and multiplying it by 1.75% (.00175 x $173,700 = $3,039.75 - this is the UFMIP) -- then add this $3,039.75 to the Base Loan.

The Annual MIP which is actually added to the monthly mortgage payment (1/12 each month) is calculated by multiplying 0.85% (.0085) by the Base loan amount of $173,700 and then divide that by 12 to get $123.04, not far off from your $115 estimate. Note: that 0.85% can vary depending on the percent down and other factors so check with a loan officer for different scenarios.

Finally, your monthly P&I payment is based on the Total Loan Amount (Base Loan + UFMIP) which is $176,739.75 and on a 30 year term at 5.00% this gives a monthly payment of $948.78, so about $16 more than what you have.

Not sure about closing costs in TX -- here that $3K would be low. 

Also when I looked at the photos of the place and read the agent comments the $7K in rehab number seems low too, it looks like the family room or living room is missing flooring and the kitchen and one bath could use some love.

Overall your analysis seemed very close to me but would love to here other member's opinions!

Hope this helps, sorry if it was too detailed -- Lol

James Stinnett