All Forum Posts by: Bryan Nwokem

Hi Bryan! It depends on your goals. You likely won't be able to cover all of your mortgage PITI with the rent payments that you'll receive from one half of the duplex. You can however significantly decrease you monthly living payment if that's the goal. You'll also likely build equity over time as long as the property appreciates.

Offcourse, the "Goal" would to be able to purchase something reasonable and after living there for a year or so, leave and have it cash flow.

0 Votes

Houston, Texas

I recently made an offer of $425,000 + 8,000 Towards closing + cost of title with 5% down on a brand-new duplex that will not be completed until October 2024. This is a 3 bed/3.5 bath 2600sf (1300 sf per unit) home. Since it will not be completed soon, the rate is not locked but as of now my realtor, who is also a lender is offering 5.99% as of today. This home is about 12 minutes away from downtown Houston, UH, Toyota Center, and several plants. This will be one of the 37 other duplexes in the gated community that will be built. The area is pretty old as most homes were built in the 1970s BUT they seem to be well-kept and have an HOA. The Average comps is $1700 According to the rent calculator on bigger pockets. Please keep these for homes of which NONE was built after 1980. I plan on living in one unit and I think that I might be able to rate the second unit for somewhere around $2,000. Maybe even a bit more. What do you all think about this deal? Please advise as I am not some real estate guru and know I have so much to learn. Thanks

0 Votes

Houston, Texas

I took everyone's advice as well as research on my own end. I ended up not even offering because after looking into the numbers, like most said, it simply did not make sense. Thank you all for even responding. God bless you all

0 Votes

Houston, Texas

Quote from @Travis Timmons:

1. Double check the 6.75% 30 year fixed rate. Even owner occupied rates are not at that level right now. Is it at 6.75% due to a rate buy down or some temporary measure? Is it an adjustable rate? I'd urge you to investigate that further.

2. The path of progress is painfully slow. Gentrifying areas are great if you can hang on, but it always takes longer than you expect.

3. As for the investment, that's a little tight for my liking. There's no margin for vacancy, a major repair, increases in insurance or taxes.

Yes Travis, I am sorry, i should have clearly stated that i was house hacking

1 Vote

Houston, Texas

Quote from @Travis Timmons:

@Mike Klarman I respectfully disagree with that take. You're telling new investor to take an out of state flip over just finding a better deal in his own market? That's a terrible idea for a first deal.

One of the keys to winning the game is to live in reality. Buying a $100k-120k house that requires renovation for someone that has no experience renovating or operating in that out of state market is a great way to set a pile of money on fire.

@Bryan Nwokem how do you feel about house hacking? That seems to be the best middle ground here if you are open to it.

Thank you so much for the Response Travis, I think it is important to add that i can use an FHA loan to get this home and do PLAN on living in one of the units. Thus House Hacking yes 100%

1 Vote

Houston, Texas

Quote from @Alecia Loveless:

@Bryan Nwokem If your rents are less than your mortgage payment with no other expenses built in then I would not do this deal. You should expect to put aside at lest 5% apiece for Vacancy, CapEx and Maintenance each month out of the rent which is already negative in this case with rent of $1650/unit.

I know your maintenance costs and CapEx will likely be less with a new build property but you should be prepared just in case you have a hot water heater go out or something else unexpected go wrong.

Home Warranties are nice if you have one on a new build but don’t always cover all costs.

Even if you wanted to lower the CapEx and Maintenance portion to 3% of rent you should still account for some extra expenses.

Thank you so much for the Response Alecia, I think it is important to add that i can use an FHA loan to get this home and do PLAN on living in one of the units since i still live at home as of now.

This was great advice, i appreciate your time

1 Vote

Houston, Texas

Quote from @Bob Stevens:

Quote from @Bryan Nwokem:

Hey Y'all, I had a question on mind. So i found a home, its listed above $400,000 Duplex in the Sunny side Place area, if you are from houston you know gentrification is happening around this are. The home has been on market for a few months, almost a year. I want to offer in the ball park of $370,00o to test waters have them meet me in the middle around 390,000 with a fixed rate 30 year 6.75%. The Mortgage would be around $3587/ month including insurance, taxes, Mortage insurance. Its a 2 unit , 3 bed 2 bath build in both units.

I am a bit worried about the investment as it is my first property any advice?

Whats the question? We have no idea if this is a good deal or not. What will the rent be? Also, you are offering way too much, not sold for a year, ok it has issues. You should not offer anything you are not ready. Show it to someone doing deals, let them look at it. Its obviously not a good deal as its not sold. What do the comps look like? KNOW YOUR NUMBERS, that's all that matters,

Good luck

Thank you for the Response Bob. It is actually a new build, built in 2023. Comps are looking interest because the average is being dragged down with all the older houses around that zipcode. Looking around $1650/month rent

0 Votes

Houston, Texas