So, you found an 1880 multiunit house and a single-family house both attached to each other, both owned by a church that put them up for sale. You made an offer for both properties for $300k, then the inspection revealed lots of issues needing attention, though not major ones, so you offered $280k asking for a reduction in price. One apartment in the multiunit house is rented, and you plan to move into the other one to qualify for a better interest rate and lower down payment (25% vs. 5%). The rent from the single-family house and the rented apartment in the multiunit house totals around $1,950, and you'll be living in the other apartment (but let's assume it could also be rented for $900), making the total potential rental income $2,850. The mortgage will be around $1,900, and repairs, let's say, $100 a month. The total down payment with closing costs will be around $50k, and then add $10k for renovations, so out-of-pocket expenses will be around $60k. Do you think this is a good investment choice? By the way, the rent has the potential to increase in the future.
@Amer Swid The whole point of a house hack is to cover some or all of your living expenses. Without knowing any of the additional expenses this seems to meet the basic requirements.
The down payment you will eventually get back and the money for the repairs presumably over time you will recover as well.
If you have the other expenses, such as the property taxes, water and sewer bills, heating bills if the landlord is responsible for those, electric bills if there is a landlord account, and any other bills you as the landlord would be responsible for monthly you can total them up and see if they will be more or less than the $900/month rent your apartment will generate once you eventually move out of it.
It might also be possible that while you are living there you can upgrade your unit some to where it could generate a higher rent when you move out.
If the property positively cash flows even a little bit or close to it where once rents go up over time with all three rents and all the expenses then I’d say go for it.
If it’s at a big negative loss I would look for another deal.
@Amer Swid The whole point of a house hack is to cover some or all of your living expenses. Without knowing any of the additional expenses this seems to meet the basic requirements.
The down payment you will eventually get back and the money for the repairs presumably over time you will recover as well.
If you have the other expenses, such as the property taxes, water and sewer bills, heating bills if the landlord is responsible for those, electric bills if there is a landlord account, and any other bills you as the landlord would be responsible for monthly you can total them up and see if they will be more or less than the $900/month rent your apartment will generate once you eventually move out of it.
It might also be possible that while you are living there you can upgrade your unit some to where it could generate a higher rent when you move out.
If the property positively cash flows even a little bit or close to it where once rents go up over time with all three rents and all the expenses then I’d say go for it.
If it’s at a big negative loss I would look for another deal.
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
2y
It doesn't seem like a bad deal. I would verify the rehab. Make sure it's inline with what you are estimating. How is the mechanicals? With it being older I'd be curious if there is hidden costs down the road. If those check out then I would say do it. House hacks don't normally cashflow so that's a good thing.
@Caleb Brown Thank you for the reply. So, things that needs to be addressed is that the fernset is old enough and that might needs to be change soon. I will let the seller to address all the hazardous flags from the inspection report. I asked to drop the purchase price to 25k to cover my bases on the fernest and other stuff.
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
2y
You've found a cool deal with this mix of a church property, a multi-unit, and a single-family home. First off, it's a bit tricky to say if it's a "good" investment without knowing your specific situation. But I can point out some things to think about. On the good side, there's a chance for double income with two rental spots and maybe renting out your own place later. Living in one of the units could mean a lower down payment and better interest rates. Plus, fixing up things could raise rent and property value. Churches usually keep their places in good shape too. But on the not-so-good side, dealing with multiple tenants and repairs can take time. Weird properties like this might mean fewer loan options and higher rates. And, you can't be sure rents will always go up, and market changes can affect things. It's all about thinking over these things and deciding what's best for your investment journey.