4Plex Deal

[Chris Herrera]

Here's the info, let me know what you guys think

PP 360k 5K closing credit FHA

Rent: 950

Mortgage: 1865

Taxes 5440                         

Vacancy 2,280 (5%)

Insurance 2400

Maintenance 2,280 (5%)

Utilities/PMI 3000 ( Tenants pay their own utilities)

Reserves  2,280 (5%)

Monthly Cashflow

W/Management $81    W/O Management $460

I know it's not a great deal when the place is managed, but since I'll be living in 1 unit for the 1st year I plan on managing it myself for a bit. I'll only pay a property manager once I get to the point where I'm starting to scale and want more of a passive role. At that point I might sell the unit after making however many years of cashflow or try to sell the units as condos as the surrounding area has a lot of townhouses/condos. The property also has a garage so I might charge extra for the people who want to use it and maybe storage space in the basement as well. What do you guys think?

[Lance Robinson]

@Chris Herrera I think this is a good deal for a house hack. "good deal" is a big word. It's hard to be positive on an FHA house hack, let's be real. With that said, this isn't bad, I would do it.

Build up good reserves and have a good emergency fund for yourself. There probably won't be value add like you think, but as rents increase and hopefully you can get out of your PMI later down the line, this will be a good little property for you long term.

I would run the numbers and strongly consider throwing money at the payment to get out of that PMI as quickly as possible if it makes sense. More piece of mind, less risk, more cashflow, etc.

Good luck!

Lance