All Forum Posts by: Account Closed

Hey Guys!,

I'm looking at buying my first duplex! I currently have a SFR as well, I will be owner occupying the new property so that I can house hack. I'm going conventional loan and going to put 5% down. I'm having a tough time analyzing this property and want to make sure that this is a good investment for me. I know that finding a good deal is the only way to get ahead when it comes to investing. The Duplex is 2200 sq ft and is a 2 bed 1 bath for each unit. The units also have a basement that each has 300 sqft (unfinished). One side is rented for $800 a month and the other is $750 a month because he does the lawn work. The owner said that it is written in the $750 person's contract that he can be told to leave 30 days after sale of the property. The units are nice and updated and seem like a high-end rental. I believe we can rent these for $825 if we found the right tenants. We would be making the person who handles the lawn care move so that we could move into the property. They are asking 140k for the property, and what I would like to do is have a mortgage on the property that is paid by 1 person even if one side is vacant I won't go without the mortgage paid. I'm not sure we can make this work since they are asking 140k on the property and the taxes are $2100 a year. Tenants pay electric, I would pay the sewer/water. I don't want to low ball, but to make this work it seems like I may have to offer 125k or so and in this market, Idk if it would get accepted.

I will pretty much be using all of my capital to fund this deal even with the low down payment.I will no longer have a mortgage if I can get the numbers to make sense, which will allow me to really save. I will also be renting my current home out for $1200 and my mortgage is $900. For that property, I paid market price and that's why renting it at this time does not bring me the cash flow I need. We do plan on moving back into this property once we reside in the duplex long enough. 

They have put a brand new metal roof on this property.

The HVAC has always been serviced, but he has had the property since 2003 and it came with that HVAC. I assume that will need to be replaced at some point.

Hot water heaters are new as well.

 What do you guys think about this deal?

What is an acceptable offer?

David Whartnaby Great advice! If I can add my two cents into the Zestimate.. never trust the Zestimate as an accurate value of your home. That is like Analyzing an area based cost per square foot, I have a lot of clients who want to know the average price per square ft. The problem with that is you have renovated this house the other similar homes around you may not even be comparable to yours. Appraisers are the toughest people to work with sometimes. When you have a property under contract and they do an appraisal they know the purchase price of the home and they keep that number in mind and they try to make it work. If you just have an appraiser come out, you won't get that kind of leverage with them. I know it sounds a bit shady but from my experience in the business, I've seen this play out. Also take in mind if you had a cash buyer for this home, you may not even need an appraisal.

It may be possible to make 1k calls in 6-8 hours but that's if they don't answer. Would you rather make 1000 phone calls and get 2 leads or 25 phone calls and 2 leads? 25 of course. This is coming from someone who will make consistently 200 phone calls a day. It's not about how many dials but how many conversations you had. The key is to use you time in the most effective way, what if instead of cold calling you were luke warm calling? Those are definitely a much easier call. How do you get them luke warm instead of cold? That's your challenge. VAs are awesome, but VAs don't speak well and training them for calls is tough. The phone call is about rapport how quickly can you build rapport with this person, that's when you can get the most out of every call. Match their tone of voice, use similar words, be a reflection of that person so they feel comfortable with you.

Check out the book "Scaling up How A Few Companies Make It And Why The Rest Don't ". This will get your mind in the right place.

I like where your head is at, and I myself had/have a similar plan for myself. I used an FHA loan to buy my first house which I was going to use as my primary residence. This allowed me to put 3.5% down, but FHA requires you to owner occupy the property for at least a year before moving. I've been anxiously awaiting my year mark so that I can purchase my next property ideally multi family. Here's the problem have you ever tried to move from a nice SFR to a duplex? It's a tough move. Conventional loans can qualify for HomeReady which is a program that will allow you to put 3% down, but you can owner occupy con. For 5% as well. The best thing about this is, there is no set amount of time you have to be using that home as your primary residence unlike the FHA loan. Also when you get 20% equity in your property, you will not pay PMI with conventional loans (FHA is for the life of the loan.) Regardless of what you do, you are ahead of the game with the liquid cash that you have. If you are putting 3-5% down that cash is going to last for a bit and help you Reach your goal.

Paul Hitchings Thank you for the insight! It sounds like keeping my current home is definitely the way to go, so that I can fix up and leverage my property. When you suggest I go multi family and have someone else fund the deal are you saying I should go in with conventional financing, 25% Down payment have my partner fund the down payment and 25% of the monthly payment, and split the return? I've contemplated having a partner and have a few people in mind that I could use. Yesterday I found a home that excited me enough to make an offer. It was a 3/2 with a full basement that was about 1000 sq ft or more that could be used for a short term rental (AirBnB). The home was a great house with a nice yard listed at 215k. I was trying to do the math on having the short term rental rented at $70 a night which is fair in my market I believe. I would have to have the basement rented for around 3 weeks to cover my monthly payment. The only issue is that the laundry is downstairs in the basement, but with creativity we may be able add one up stairs at some point as well. I suppose with the kitchen downstairs, laundry , and a possible 2 bedroom situation I could raise the price to $100 a night. I have not done enough research on short term rentals to justify this scenario yet but the house is a great house and my wife loves it (which does not happen often). We were going to submit an offer but the payment was $1400 when we were expecting $1250. What do you think about this strategy? We would rent our house out and move to another that we would use as primary and a rental, essentially like a multi family.

Firstly, let me start this story with a brief background. I have been in real estate for 15 months now, and I love it. I actually decided to get into real estate because of the experience I had with an agent. They were so motivated and proud of what they had done, I thought I had to get in on it. It was by far the best thing I have ever done. I joined a real estate team and ended up buying a home about 5 months after, and made the move 30 minutes from my hometown. Shortly after that, my wife and I had our first child ( a true blessing). I was considering my first purchase being a multi family home but decided against it. I have bit myself for it ever since, and I'm convinced that this time will be different. I read the book Rich Dad Poor Dad and it changed my life, I had already been thinking about real estate investing but this really pushed me in the direction I needed. My whole life I have been looking for the answer to how to enjoy life and be "free", I started studying highly successful people and it seemed like the common denominator was passive income, and it seems like real estate is how everyone does it.  Rental properties are my main focus, but I like the idea of flips but at this time what I'm looking for is passive income. I read Brandon Turner's "The Book On Rental Property Investing", which prompted me to join one of the free webinars. I sat in on a few other webinars after that (not BP).  I then read the book on "Real Estate Investing With Little To No Money Down", another GREAT book I got a ton of information from. I'm so grateful for this last year of intense real estate investing study, and cannot thank BP enough for the books I have read and the information I have acquired.

I'm now looking to purchase my second property. My first property I bought for 130k with an FHA loan and collected my own commission so I was in the house with very little money down. This home with taxes and insurance cost me roughly 900 a month (870 to be exact). I pay 450 bi weekly to save on interest payments. The home will probably rent for $1,150.00 a month. I have figured the numbers for my home, and I don't think this would make the best rental. The home has a fairly new roof and a brand new(2016) HVAC. I can probably sell the home, and after commission come out about even or rent it for around $1,150. We love the home we are in but my passion for having rental properties is pushing me to move. I will owner occupy my next home with a 5% down payment conventional loan while renting my home out. I've gotten the approval from my lender that I can start looking now because I have 60 days to occupy the property and that will line up with my 1-year mark of being owner occupants of the FHA loan. Luckily with the conventional loan, there is no time frame on how long you must occupy the property, so I could move back into my house after some time and rent the home out. The market is super hot right now, so I'm keeping my options open for Multi-Fam, but might consider going SFR again. I would like some insights on what everyone else thinks my best move is, since we do like our current house and would like to stay in it if we could, but like the idea of buying a nice rental living in it for a brief period of time and doing it all again until I have a few properties under my belt. I know that many investors start out house hacking, and I will certainly be using this to my advantage since I don't have mass amounts of capital at this time and can collect my own commissions.

I guess a few questions I have are as follows...

-Would you rent the property that I currently have a mortgage on that would bring $250 after paying my mortgage? I know that does not leave much room, but I have to lease it for at least a short period of time before moving. Could this become a long term or should I rent for a short period of time and sell?

-Would you invest SFR or Multi Family?

-Are there any tricks that Im not aware of that would help me in my situation?

I look forward to seeing your responses! This is my first big post but am looking forward to giving back some of the things I have learned in Real Estate so far!

The opportunities are out there and even if they aren't there is a chance you could create the job that you would like. I don't think a real estate agent part time would be something worth pursuing unless you had a few deals from the beginning. There are other jobs out there, you just have to network with the right individuals. I would seek some top producers in your market place and pick their brain on what they struggle with, find a way to fix their problem and go from there. It's all about creativity, and doing what others aren't willing to do.

Olivia Boardwine if you ever have any questions let me know. The actual real estate courses won't teach you very much about the ins and outs of the business, only generic guidelines of what to expect and ethics.

Thank you for sharing your story! Glad everything worked out for you and you are finally doing what you have dreamed. Best of luck in your future in Real estate, you will not regret your decision!