All Forum Posts by: Christopher Short

@Adrian Birchler I am currently in the process of purchasing a fourplex that I will be house hacking using the VA loan. Before putting in an offer I ran numbers on almost every property I could find that fit my criteria. When running the numbers I always ran them as if all four units would be under a property management company (10% of rents being paid). I later learned that only the units being rented out by the management company will be charged a management fee, however, long term it’s good to analyze as if all four units will be under management. Your realtor should give you the current rent amounts (assuming they are occupied) and I chose to run my numbers with the current rent instead of potential future rents. I also am running numbers as if all four units are being rented... so each month I will add the rent amount into my account as if I were paying rent as well. Purpose behind this is because I am doing a buy and hold strategy and I would have to pay rent if I lived anywhere else. Also accounted for 7% vacancy. These are just some of the things I considered when running numbers! Hope this helps.

Recently put in an offer on a fourplex in the greater Killeen, TX area. My offer was accepted and we are currently under contract! After looking over the rent rolls and leases, I am considering changing management companies. I will be house hacking my fourplex; currently all units are occupied. One  of the leases is ending in December (this is the unit I will move into). I would love to hear from others who have changed management companies following the purchase of an investment property! Some of my questions regarding the change of management companies are:

-How does this affect the current leases? 

-If one tenants rent is significantly lower than the other three, am I able to raise that person rent to match the other three? 

-Is there a cost to change management companies?

-Since I will move into one unit, should I pay “rent” to the management company in order to keep a history of payments?

Any and all advice is welcome! Thanks ahead of time!

@Michael Mullins I will be looking for a handyman/contractor soon in the Killeen/harker Heights area. Thanks for the recommendation. 

@Jason DiClemente @Caleb Heimsoth thanks for the input. House went off the market, but will stray away from flood zones due to extra insurance cost. Thanks for the input!

Recently been looking into fourplexes. One of the homes I’ve been looking at stated, “Note: a small portion of one corner of property lies in 100-year flood plain. Have appraiser confirm, this designation may have expired.” Was wondering if anyone has had experience with rental properties in flood zones? I am especially curious about how it may affect rents and home sale values. Also, what is the general cost of flood insurance for multi family properties?

@Clifford Paul 

Thank you for your input. I am always fascinated to hear how others are using their VA Loans. I will definitely look into the VA IRRRL refinance loan. The VA IRRL seems like it would be a good option and fit for my goals.

What types of homes (SFH, Duplex, Fourplex, Apartments) did you purchase with your VA Loans. Furthermore, how many VA Loans, with or without the VA IRRL, have you had open at one time?

@Joe Scaparra and @Danny Webber

Joe, Thanks for sharing your story. 

You both make very solid points and I have already begun looking into towns around Austin. I do plan on living in the one of the units until I either receive PCS orders or deployment orders. The towns around Austin will still allow me to live within a reasonable distance from post. Unfortunately, I will not be able to change my residence anytime soon because my current apartment lease doesn't expire for a couple months.  

I do plan on getting a PM regardless of the location the fourplex (in Killeen some people have recommended Gold Medal Property Management). If/When I get deployed, I will more than likely give power of attorney to my mother so that she will be able to resolve any complicated issues that may arise. She has owned multiple rental properties and has the proper experience and trust required to hold my power of attorney. 

@Caleb Heimsoth

I have found properties in Killeen that will cash flow with zero down. Are they sound Investments that will  quickly get rented out and appreciate? I am not sure and that is my main worry about Killeen. The constant turnover because of deployments and PCS orders may cause vacancy rates to be higher than normal. 

As far as the mortgage goes, I will have to look further into the laws and rules surrounding the VA Loan. Deployments are not guaranteed. I intend on living in the property for at least a year or as long as my job within the army permits me to do so.  If I am receiving enough cash flow from the other units, I may be able keep one unit as a primary residence while deployed for nine months. 

If there is a will, there is a way. 

-Chris

@Jeremy VanDelinder

Jeremy,

I appreciate the help and input. I will definitely take a closer look at Williamson County. Would you recommend any relators or property managers in the area for first time buyers such as myself?

-Chris

@Danny Webber

Danny,

If you don’t mind me asking, what general area have you been buying Fourplexes in (I’ve found some for sale over by Robinett Rd area) and what kind of cash flow are you receiving from them after all expenses?

I am considering a buy and hold strategy mainly for passive income which may be a viable option in Killeen. What are some of the Pros and Cons you have noticed when purchasing and renting Killeen fourplexes and apartments? 

-Chris

@Joe Scaparra 

Joe, thank you for your time and input. Most of what you are saying makes sense and is a reason I have also been looking outside the Killeen area. Some realtors I have talked with have mentioned the slow appreciation of the Killeen housing market. My ideal market to invest in would be Austin because that is eventually where I would like to live. However, I have not been able to find as many duplexes or fourplexes for sale (probably a good sign) in the Austin area. I have also looked into Round Rock as I have heard that it is an up and coming market. If you have any suggestions on where within the Austin or Round Rock area would be a good place to start looking, I would love to hear them!

I am very glad to hear that the thought process behind using my VA loan sounds solid. It will allow me to get into the market with very little money down while also gaining a ton of knowledge and experience. Once I come back from deployment, I plan on doing a similar sort of house hacking to purchase my second duplex or fourplex.

If you don't mind me asking, why have you chosen not to use your VA Loan? What type of financing have you used instead?