All Forum Posts by: Andrew B.

@Deniz Eker where are you buying? I live locally in a suburb of Cleveland and am looking at SFRs right now.

Thanks Mark!

Hi Alex,

I just bought a duplex in Lakewood as a house hack in April.  Very competitive market when I was searching but if you can get the right house, its a really great position to be in.  Let me know if you have questions I can help you with!

Hi, I am looking for a lawyer who also owns a title company. Anyone have referrals?

Hi Sylvon, I recently completed a transaction just as you are describing. Congrats on figure it out 12 years younger than I did!

This is an awesome way to get started in real estate investing without a lot of money.  Some things you need to keep in mind when doing this:

1. Evaluate the deal as if you are renting out both units.  You can make almost any owner-occupied multi-family deal work on paper but unless you are prepared to live in it long-term, underwrite the deal as if you are renting out all units.  It's really easy to justify a negative cash flowing property by using the logic that "it's cheaper than rent/less than a mortgage payment would be".  Depending on your market, you want it to be cash flow positive or at the very least, cash flow neutral (including reserves for maintenance/repairs, capex, and vacancies).  Bigger Pockets has a calculator to help you evaluate the cash flow for the deal.

2. You MUST establish and maintain principal residency in the property within 60 days for at least one year.  See link for more information: https://www.hud.gov/sites/documents/4155-1_4_SECB.PDF.  Failure to do so constitutes mortgage fraud and your head start will be wasted.  Do not take this lightly.

3. You will pay PMI for the entirety of your mortgage until you refinance out of it. It is a monthly fee based on the original loan amount so it does not decrease as the loan amortizes. However, the low interest rates on FHA loans more than make up for it.

4. Make sure that the area that you buy in will attract tenants that you are comfortable living in the same building as.

5. Treat your landlord duties as a business from the start.  Just because you live in the same building doesn't mean you should be soft with your tenants.  Read "The Book on Managing Rental Properties" to understand what I mean by this.

6. In terms of qualifying for a loan, FHA loans have lower lending standards than conventional mortgages so you should have less trouble qualifying than other loan options.

Hope this helps!

@Evan Polaski

Makes sense and thanks for sharing the link on getting set up!

@Evan Polaski

Thanks Evan! QBO is preferable to something like Stessa that is tailored for real estate?

@Anthony Wick

Definitely understand what you are saying here. I suppose if you set the guidelines early for how the relationship will operate there shouldn’t be any issue.

@Remington Lyman

Makes sense to me. Due to the quality of the neighborhood we expect to have a very qualified applicant pool so we are hopeful that we will avoid many of the issues that could create hostility from tenants/former tenants.

@Corby Goade

Awesome feedback! A PM LLC is definitely something I am considering setting up in order to create a more professionally managed situation with tenants and then it'll be helpful to have in place as we scale.