All Forum Posts by: Keith N.

Welcome Daniel Monserrate . I have become somewhat of an addict myself! You'll find the best REI info online here on BP. Be sure to lookout for posts regarding the Raleigh meet ups we've been having. The goal is to meet once a month as much as possible

@Andreas W. I thought about purchasing one of these as my first property, however most do not allow you to put less than 20% down even if owner-occupying.  I am curious as to whether the 3/3's really offer you the amount of cash flow to make a decent amount of money? 

When I was looking at 4/4's and 3/3's near NC State it seemed that for example in a complex a 3/3 would sell for ~100K, while a 4/4 would sell for ~112K.  That 4th bed and bath seemed to really be the deal breaker between mediocre and excellent cash flow.

@Eddie Jenkins Welcome to BP! Sounds like you're in a very similar boat as myself. I graduated in 2014 and I am bored out of my mind with corporate America myself. I just purchased a duplex as my first property a few days ago, and I'm prepared for a huge REI learning experience.

Shoutout to Michael Jobe for representing me as a buyers agent and assisting me throughout the entire process! Extremely knowledgable about the Raleigh real estate market.

Originally posted by @Zach Adams:

@Keith N.

Congratulations! I don't know your market, but since this is owner occupied it doesn't have to be a great deal.  I approach house hacking as hybrid investor/homeowner.  Sure the numbers need to work, but since I'm going to be living there, I can let some things slide.

I'm in escrow on a duplex here San Diego County. The numbers are different and not as good as yours, but I'm excited to get in my property as well. What's your PMI? With new FHA guidelines, the PMI doesn't go away when the loan is 20% paid. It sticks around for the life of the loan :( I'm getting in at 3.5% down and will be saving up to put down the remainder to get to 20% and refi to get a conventional. I hope the rates don't go bonkers in the next couple of years. At this point, my cashflow when I move out will be substantially more. Plus I have a pretty strong chance of appreciation here in SoCal.

Great work and I also like that you're taking a roomate on your side to maximize your cashflow.  I've been thinking about doing the same thing.  Is it someone you know or a new renter?

Great work -

Zach

Hey! 

1) I'm pretty sure my PMI is at right about $120 - $125. Yes, that's A LOT but my numbers make sense. FHA will have a higher PMI then a regular conventional with under 20%, but my numbers work and this is what I had to do to get in. I qualified for 5% down conventional, but you cant do less than 20% down on multi-family's with conventional even of you owner occupy! I plan on a Refi as soon as possible as long as it makes financial sense.

2) my roommate will be a buddy of mine I went to Highschool and College with.  I even roomed with him at one point in college.  Can't remember anything specifically about him that drove me nuts, so it should go smoothly!  Also, the house is 1,100 sqft and 2 floors so that should be enough personal space for us.

Originally posted by @Kevin Hughes:

1. How did you find the property as soon as it was listed? Someone mentioned Redfin. Is that was you used as well?

2. What was your experience in getting approved for a FHA loan? Any recommendations on how I can do that process well?

Thanks! Congrats!

1) My realtor hooked me up to his MLS feed online so that I received email notifications when properties that met my criteria hit the market. It hit the market at about 7:00pm at night and I was out at the property the next afternoon. Any realtor should be able to set you up with this service as it's free and easy for them to do! Also, I had an extremely responsive realtor so that when I told him I saw a good property we could immediately get out there if neccesary.

2) As long as you meet all the FHA criteria, everything else should be smooth sailing. Make sure you gather ALL of your financial/personal info beforehand. The lender will want EVERYTHING and its a real pain scrambling to find all of it if you aren't organized. Credit Unions will be able to get you the best interest rates and lowest PMI, HOWEVER their employees usually suck and they won't be able to give you as aggressive of a loan. I haed to use a regular mortgage lender for this property because a credit union would only give me a loan up to 140K.

@Ryan Gaus From what I have seen, 1.3% - 1.4% and $400/door is excellent.  What type of neighborhood/areas are these homes in and how heavily did you have to rehab them?  

@Ryan Gaus Thanks!  I like to be conservative with my numbers so that I can (mentally) take financial hits better as they come up, so the real numbers when said and done might end up slightly better depending on rent/repair costs.

I know my numbers aren't fantastic compared to others on BP, but like you said I am very excited to "get in the game." May I ask what type of properties you have in Raleigh and what types of Cash Flow/ROI numbers you are seeing? Just curious how others are doing.

Also, I'm not sure how to edit these posts but I made an error at the top.  Essentially my Down payment + Closing Costs + Appraisal Fee's were $7800.00.  My Repairs will total approximately $3500.00 (but I got a $2000.00 credit from the seller).  So my total up front costs to get into the house and do Repairs are around $9300.00.  I'm sure an extra $700.00 will come out of my pocket somewhere, so it's safe to say an even $10,000.00 to buy the house and make repairs.

@Matt Rothwell

I'm sure it's the one you're thinking of!  It was listed at 165K, and I was out looking at the property within 16 hours of it being listed.  I put in an offer at 160K initially (les than 24 hours after it was listed) and apparently my offer was the first offer.  The following day the listing agent contacted my agent and told us there were multiple offers and to bring your "highest and best."  I ran some numbers and decided to go with the highest price that I thought I could still definitely make a "good" amount of money.  That price was 180K so that's what I offered and it got accepted.  The house appraised exactly at 180K so I did not have any issues.