Rental Property Investor · Westchester County, NY · Member since 2018 · 30 posts · 28 votes
Hi all, First steps out of the gate here, and I just wanted to get some input from the folks here that have been doing this for awhile.
I came across BP too late in the game and had already purchased a SFR. I now want to buy a triplex, house hack the other two units, and rent my SFR out. As an aside, I don't want to sell my SFR because I have a favorable HELOC that I plan to invest using the BRRRR strategy.
SFR
My existing mortgage is $2537 all-in. I can get $3k to rent this house. After I calculate my capex + vacancy + maintenance, I am -$70 a month. I will have to manage it on my own for a time, which I am okay with.
Triplex
The HouseHack Triplex after Capex + vacancy on the other two units + maintenance while I'm living there will be -$296 while I'm living there (1 year minimum for loan purposes), and +$1005 when I move out based on current rental rates.
Assuming all units are filled when I move into the Triplex, I am technically exchanging my $2537 mortgage for a $371 payment to own two properties. Here's my question, am I fudging the numbers if I use the balance of $2166 (2537 - 371) as a positive monthly number? I understand this is no longer an income, but it is more specifically a reduction of debt.
How should I be framing this concept financially? It seems like the cost of inaction is very high.
@Gabe Viteri it seems to me you just reduced you living expenses by $2166. That is a significant reduction. I think that is a good financial decision as long as you don't blow that money on something else. If you save that money every month that will grow pretty quickly.
Assuming these properties are located well in time inflation of rents should turn them to positive cash flow.
@Gabe Viteri it seems to me you just reduced you living expenses by $2166. That is a significant reduction. I think that is a good financial decision as long as you don't blow that money on something else. If you save that money every month that will grow pretty quickly.
Assuming these properties are located well in time inflation of rents should turn them to positive cash flow.
@Gabe Viteri, may I know which institution you go with for your HELOC application? As I live in Westchester too and am looking for the right institution to go with.
@Joyce Ong I used Beth Page Federal Credit Union. However, I've recently found a better rate, no application/processing fee, and will potentially refinance into them. Call Trust Co in Northvale NJ. You'll have to google their phone number due to forum rules. Gina Sarwari is who I worked with. Tell her I sent you! She's amazing.