HEEELLLPPP!!! Just Got My First Response to Letters! NOW WHAT??

[Beth Anderson]

So far I have sent out 85 letters to absentee homeowners and distressed properties. Today I got my first phone call!! I'm feeling very overwhelmed! I've been studying my butt off, but now that it's happening, I feel lost. Here are the pertinent facts:

We are looking for a multi-family house hack to start with. (There is myself, my husband, and our 4 year old daughter.)

The seller is 70 years old and is ready to be done being a landlord.

The duplex is right in our target area. It looks in pretty good shape from the outside. The owner really likes one of the tenants but doesn't care about the other. (He is going to tell the ones he likes that he is selling and ask if they want to buy it before we proceed any further.) He has been seriously undercharging the tenants, and he knows it, but felt it was better to keep great and decent tenants in there than to raise the rent.

He doesn't have a number in mind. He had only played with the idea of selling it before he got my letter. He's going to look at numbers. He wants to talk to his lawyer before considering the idea of seller financing. (I told him we have other options, but I would rather that he gets to make the profit instead of the bank.) We are going to touch base in a day or two.

I have run the numbers on the Brrrr calculator, but have ZERO confidence that my guesstimate about rehab costs are accurate. Or ARV, or purchase price.... etc.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

[Alecia Loveless]

@Beth Anderson For a house hack property you don’t have to hit a grand slam deal. You can land a deal that works nicely for you and makes sense. Your first few deals are learning experiences and it’s likely you won’t make the best deal of your life until you have more experience.

I’d focus on trying to land this deal and getting it set up to lower your current housing payment as opposed to being able to just generate a deal that totally pays for you entirely from a duplex. It’s virtually impossible in today’s market to do that.

I’ve been house hacking a duplex since 2020. My tenant pays below market rent because we want to support him and it’s a win-win situation, in that he fits in well with our lifestyle. We pay for the property taxes, the water and sewer bill, and usually do some sort of capital improvement to the property based on his rent each year. This year we’re putting in 9 new windows into his unit.

I'd recommend taking a deep breath and not worry so much about ARV, CoC and just look at a way to decrease your cost of living while buying your first property.

You can do renovations as you go along like I am and then get those tax benefits for the rental side each year.