All Forum Posts by: Dan Graney

Oops I thought I was typing this into the search window.

Anyways I am considering buying a duplex and living in one side. Wondering how to operate that as a business. I will be paying on an FHA mortgage.

Just starting out and

Thanks for all the great comments and insight.

Aleks you mentioned something I did not know.

"Your cost will also be lower besides the fact you don't have MI you won't have the MI for the life of the loan like you will with FHA."

I assumed that I could make the MI go away once the loan was paid down to be 80% of the original loan value. I am going to have to look into this. Or if anyone reads this could you set me straight please?

So after looking at the numbers again it is not as good of a deal as I thought. Using the BP calculator and putting in mid range percentages for Vacancy, Cap EX &  Repairs it looks like it will cash flow right about $200/month if I rent out both sides. However I forgot to take into account that if I move into one side, the money that should be set aside for upcoming costs does not change. So who puts that money in the account if it's not coming from the rent. Oh crap, I do.

At the end of the day if I live in one side then I will only be like $315 better off per month rather than $600. But still I will be banking some money, that when it goes to eventually pay for expenses, will be tax deductible.

So now the debate in my head is do I want to trade some lack of privacy for a modest financial gain? I know that it will be more than just the $315 a month because I will have an asset that I will be building equity in with the help of OP money but I have never shared a living space with a stranger before and I am not looking forward to it.

So I have been renting for the last 12 years paying $650 a month for a 1250 sq ft house. I like the area that I am in but it is not a growth area at all. Plus all of that money is just going to help somebody else's net worth. 

I have been on BiggerPockets for a couple of months now and decided that a good first move would be to do a house hack and live in one half of a duplex.

The area that I am looking in has great schools and is a definitely growing but there are almost no multi-family properties for sale.

I found a place that is only a little bit under market value, not really what could be considered a DEAL by most Bigger Pocket standards but after running the numbers thru the calculator it looks like it would cash flow just under $300 a month. I think I was fairly conservative on the numbers making sure to put in midrange percentages in all of the area like Cap Ex and vacancy.

If I were to live in it, I would be only kicking in like $50 a month towards the expenses so basically that would leave me $600 better off every month.

This still seems like a win to me but I am concerned because it is so close to market value that I really wouldn't have any immediate equity.

On the positive side it is turnkey and needs zero rehab so I can start renting it out immediately.

BP Thoughts?

Thank you all for the responses.

I don't really have a buyers agent. I had one guy show me 3 houses a couple of months ago and then I spoke on the phone to a different agent. The second agent I was wanting to work with because she was an invertor herself and knew the area well. But I have never been thru a property with her.

I read the article on "procuring cause". So far there is zero buyers agent involvement. My concern is that the agent who showed me the property works for the listing agency so I would assume was that her first priority was to get the best deal she could for her broker. So far she has walked me thru the property but has not really done anything besides that.

The reason I thought about getting a buying agent is because they would try to get the best deal for me and also may be more prone to point out things to watch out for.

I guess I need to make one more thing clear, I haven't purchased a home in over a dozen years so I am just trying to avoid what would essentially be a "rookie" mistake.

I am trying to decide between two good buying agents that I have worked with in the past. I saw a property that I wanted to walk thru so I just contacted the listing agent to take me thru it. Since they are a selling agent I would like to have someone represent me as the buyer when I put in an offer. I imagine this will take away part of the selling agents commission but I want to cover my back. Is it against protocol to have someone else put the offer in now after the other agent has done some work on my behalf?  

Was wanting to us an FHA home to buy a multi-family property. My son is looking for a place to live and I want to use him as a property manager. I am wanting to use an FHA loan because I do not have a lot to put down. I went to the FHA website and they do have a provision for more than one person to be on the loan and both do not have to live their under certain circumstances. One of the ways that this is allowed is if the co-owners are blood relatives. Here is where I found this rule

http://www.fha.com/fha_article?id=513

So the question is how do I legally put my son on the loan?

Thank you for the response Roy. Yes I am looking for a 3 or 4 unit property for an investment and he is looking to move. Would also have him do day to day management and maintenance.

looking at purchasing a multi-family unit and I was wondering if I could put my son's name somewhere on the paperwork that would legally satisfied the need for owner occupancy if he moves in there.

Great insight Joe. I have yet to sign up to see all that the HUD sight has to say about a property. Those things that you mentioned about the insurability of the home were things I did not consider.Looks like I need to get access to the HUD website.