All Forum Posts by: Brad Reiner

Hello,

I finally purchased my first duplex using a 3.5% down FHA loan. I'll be living in one unit, having a roommate paying me rent in my personal unit, and also renting out the other unit. I'll be profiting a few hundred dollars after paying the entirety of the house payment and when I eventually move out in a year, the property should cash flow nicely with both units rented out.

I'm curious for ideas on how to acquire my next house hack with as little money down as I can get away with since the goal is to buy a property a year from closing on this duplex I just purchased. I believe I could purchase an owner occupier single family home for 5% down and just get a bunch of roommates. I'm thinking anything multi family will require a minimum of 15% down. Not sure if 203k loans are considered FHA loans since I know they're intertwined, but if they're not, that could be a great option. Any ideas I'm missing? Curious what others have done in similar situations.

 Hello,

So when I ran the numbers I think the rents I used were maybe a little bit low after more review, and I was probably being a little bit too conservative, trying to make sure the cash flow could pay for a property manager for instance, when I don't plan on using one. For my example, with those specifics in mind, I'd be losing 30 dollars a month if I was strict about not touching reserves, although realistically with my actual situation and charging the correct rent, I would have a positive cashflow. I think all in all though, even if I was losing 30 a month after strictly setting reserves aside, I could probably justify it. In my head it's like paying 30 dollars a month to invest $1000 a month into the principal of an asset that should appreciate in the long run. 

I'm literally in the same exact situation, so I feel for you. On the bright side, it seems like this was the push both of us needed to move forward towards our real estate investing goals. Keep your head up and press on!

Yeah. I've been rerunning the numbers and it really just depends how conservative I am with running the numbers. Also, I think I was plugging in rents that could have been higher after looking at similar rents in the area. When I ran the numbers, I did things such as set aside money for a property manager, although realistically I would be managing the property myself and wouldn't use a property manager until way down the line in this real estate investing journey. 

Hello, 

Soon I plan on purchasing a duplex in Lakewood, OH. I plan on living on one of the units and renting out the other unit initially, and eventually moving out and keeping it as a full rental. I'm looking at a homes around $250k since I should be able to afford the mortgage out right even if I had a delinquent tenant or extended vacancy. I'm planning to use an FHA loan where I'll only require 3.5% down and very likely using an Ohio sponsored down payment assistance program. I might have $30-$40k to put towards the down payment and cover closing costs, and whatever other expenses come up.

 It almost seems impossible to find a deal that will cashflow in the case that I move out since I'm putting so little down. I'm wondering, should I accept a very minimal loss (maybe a negative cashflow of $30 a month after expenses/reserves) just to get some skin in the game? A part of me thinks I should just maintain really high standards to get the right deal, but on the contrary, even if I was negative cash flowing $30 dollars a month, the shear fact that I'm losing 30 dollars a month could be worth it in the long run since the tenants would be paying off the mortgage, the property value should ideally increase over time, and I'd be able to build equity that I wouldn't be able to build if I just went off and rented an apartment. I feel like there's a lot of value in just getting started period, and if I don't act now, home prices will continue to rise, and the only thing I'll gain is becoming an expert at using the bigger pockets rental property calculator.

Curious if others have input, have maybe been in the same boat, and how they've reacted to scenarios like this. 

 

That example was actually from running numbers on a multi family home in North Ridgeville, rather than Lakewood, but the goal is still Lakewood.

Hello,

Soon I will be making moves to purchase a duplex in Lakewood, Ohio, where I will live in one unit and rent out the other unit. I'm just learning how to analyze properties in terms of determining offering prices that will make a deal worthwhile.

Anyways, here's my silly question:  

When using the BiggerPockets Rent Estimator Tool for a multifamily property (in this case a duplex), is the number the estimator spits out the estimated rent for both units, or the rent for each unit (i.e. if I plug in an address of a duplex, and it spits out the number $825, is it estimating 1 unit renting for $825 or both units combined renting for $825) 

Thanks!

I’m loving all the insight everyone. I’ve got a lot to think about but this all definitely helps. It’s amazing how many people on here are nice enough to take the time to give some advice. 

Hello. My name is Brad and I just got my first real career job where I'll actually be able to set money aside and not continue living paycheck to paycheck (Wahoo!). I'm just starting the process of saving up to get into real estate investing, and also starting to research my best method of getting involved. The BRRRR method is one of the more appealing methods to me. My question is: For those that BRRRR your first property, how did you finance the rehab. Having the cash saved up is an obvious answer, and I know FHA203K loans exist, but they require you to live in the property. Is there an investment loan similar to the FHA203K loan that combined the property and rehab into one loan, or am I making things up that are too good to be true.