All Forum Posts by: Daniel Sager

@Michael Haas I'm guessing so because even the landlord tenant act says "You may have heard that it is unlawful to evict someone in the winter but this is not true."

@Michael Haas

I just purchased my first 4plex and this is (luckily) not true although I had heard it from nearly everyone for years. I looked up the Alaska landlord tenant act and it clearly states that the season has nothing to do with eviction.

@Andrew Postell

That makes total sense sir. Sounds like the BRRR is for folks that don't want or can't owner occupy; hadn't seen that in anything I had read so far. And yes, very low interest rate!

Regarding the appraisal, what I've been told by a couple of realtor folks is the appraisers don't want to risk messing up the deal by having too big of a swing in either direction and then risk not getting used again. Not sure how true it is but I've asked several people about it in this market and they've said the same thing. That being said, most of the 4plexes here for sale right now are listed too high to where it didn't make.

Thank you for the clarification!!!

@Andrew Postell also I'd like to add that the reason I am considering this is my dream is to build a small home (not a tiny home!) with cash in a couple of years after I househack my way into a couple of 4plexes.

@Andrew Postell

I used an FHA loan with 3.5 down and I am currently occupying one of the units. I'm renovating two of them and the empty one I mentioned is in much need of updating; the other two are in pretty good shape but I could throw $2.5k in to each unit (windows included) to make them really nice.

The seller was motivated due to a divorce and based off of the other comp properties, it was listed about $40k low. The appraisal came back *exactly* what the contract amount was and I was told appraisers typically don't value a house higher than the contracted amount.

Currently it will be cashflowing a couple hundred per month when fully occupied and when I move out, it will cashflow about $1400-$1500.

@David Ripplinger okay so $100 per door minimum the first month and you've essentially got zero money in the deal and the ability to roll the money into the next one. So it's a question of cashflow VS volume of doors.

Thanks for the response !

I just purchased my first 4plex a month ago and have been doing some upgrades in my unit and now, with a unit (thankfully) getting abandoned, an empty unit.

My current plan is to hold this property for the foreseeable future as it is profitable but was curious if I should look at cashflowing the rehab of all the units, refinance and pull the difference out.

It seems that the BRRR strategy doesn't allow much cashflow but the investor is betting on appreciation? Just curious on folks' opinion of when it makes sense and when it doesn't.

My current plan is to buy another 4plex in a year and move into that one to continue to take advantage of the low down payment. That being said, I have a large cash reserve already and don't need to pull anything out of this building to buy another one.

Thanks

@Frank Jiang

I was literally getting ready to type this 😂

@Trent VanHorn

Hi Trent,

I would recommend not doing this in a MF situation. I have owned 3 single family homes and rented out all of the rooms while I lived there which worked well because I could screen the folks and minister everything. I had amazing luck but there were a few instances where I had to resolve disputes.

I just bought (literally yesterday!) my first 4plex and I had the same idea you did because if the income potential but it's honestly just not worth the trouble. I'm willing to bet you would have such high turn over on the rooms that the potential empty rooms would wash out the profit from it being fully rented. If you have the units on leases, you more or less have no worries for that term as opposed to all of the screening and vetting of 8 people on month to month leases.

Now, what I do plan on doing since I am doing owner/occupy, is I will be renting out the 2 extra rooms in my owners unit to bring in about $1100 extra per month and when summer hits, I will have at least one of those units completely furnished and have it set up as an Airbnb.

You could also have one unit dedicated to that for the tourist season.

Good luck sir!