All Forum Posts by: Account Closed

@Nicholas Bolcon

Hey Nicholas.

I got a $500 increase. Wasn’t nearly as bad as I was expecting. The mill rate was adjusted downwards. 

 Did you ever find out if the rate was going to change or decrease? I'm in a very similar position as you are. About to close on a multi family in West Warwick and I'm looking at an increase of $2400 in property taxes over what was provided in the disclosure for fiscal year 2018.

Sorry for writing the post twice. Tried to link to your name for the notification.

@Nicholas Bolcon

Did you ever find out if the rate was going to change or decrease? I'm in a very similar position as you are. About to close on a multi family in West Warwick and I'm looking at an increase of $2400 in property taxes over what was provided in the disclosure for fiscal year 2018.

@Larry Turowski

Thanks for your reply!

The $7500 would be itemized into the contract. Its basically a check for the repairs but I will use the 203k for the repairs so I can keep a cash reserve (I don't have a lot of capital on hand for repairs after purchase).

I also forgot to mention that while it would be inconvenient to relocate, I would save about $5000 in state income tax (I work remotely and would change my primary address). So I'll be out of pocket $2000, plus the headache =). 

As for my net worth, If I don't go through with the deal I will keep the $7000 in cash immediately and I will probably be able to save an extra  $1500-$2000 a month( money I would have budgeted towards the house.. repairs/vacancies/capex, contingency,etc). 

So in a year I would have no house nor headache but about $25k cash saved in the bank. This is in addition to the money I already have saved up. Perhaps it would be better to pass up on the deal, but that means I probably wont be ready to throw down for an investment property in my area (25% + closing costs) for at least another two years unless I look in other markets (Midwest and South). In the latter case, I could probably find a cash flowing house within this year. It would just be more of a hassle to travel there so it would have to be turnkey and professionally managed. 

Overall, if I were to make the purchase and continue to build equity year after year it would cash flow very well. Especially if I refinance out of the FHA to get rid of the MIP.

I'm just not sure about taking on negative cash flow for the first year, plus dealing with the repairs and 203k loan for my first house-hack/investment. In terms of principle I wouldn't ever take on deal that is negative cash flow from the start.

Hey BP members, I'm in the midst of potentially making my first acquisition of a buy and hold property. Any third-party, impartial advice would therefore be greatly appreciated.

The property is a two family home in need of a few repairs.

Estimated ARV: 230,000 - 250,000

Purchase Price: 200,000 + 18,000 Repairs (I will be using a 203k Loan with about 5.5% Interest; 3.5% down.)

Closing Costs: $9,680 - $5000(Seller Credit) = $4680. The seller is also willing to give me a personal check for $7500 at closing to offset potential repairs.

Down Payment: $7630.

Property Tax: $5100

Home Insurance: $2050

Mortgage Insurance: $1800

I will be living in one of the units and renting the other (Fair market is about $1300 for that unit). Both units are currently unoccupied.

The home is going to be negatively cash flowing about $600 a month for the time that I will be living in it (1 year). So i'll be coming out of pocket about $7000. After I rent out the unit that I will vacate (about $800-$900 a month) then the cash flow will be about $230 a month, accounting for vacancies, capex, and maintenance.

It's a B neighborhood, residential with a lot of families.

Is it worth coming out of pocket about $7000 to reach the point at which the duplex will cash flow at $230 a month? I dont need a new place to live and it would be cheaper to stay in my current place. So I consider the $7000 a debt burden, not necessarily living expenses. I'm just using the 203k loan to potentially get the property and because I want to get started with something. Is this a bad idea? Should I wait until I have more $$$ to throw down and get a property that cash flows from day one? The cap rate on this property after a year (7%) is about average for the area. I'm in the New England area so super high property taxes =(.   

Any advice would be greatly appreciated. Thanks everyone!

@Anthony Thompson @Chris Mason Thank you both for the input! My mind is at ease now =)

Hello all! I have a question about the owner occupancy clause of an FHA-backed loan. I am looking to use an FHA loan to finance the purchase of a great Triplex that I found in Rhode Island. I currently live and work in NY. I would be moving into one of the units (currently vacant) and renting out the remaining two. I have a job that enables me to work remote, so I will not be seeking employment in Rhode Island. My significant other and most of my friends live in NY. I would change my mailing address and my drivers license to the unit in Rhode Island, as well as car insurance.I would also change my address to the unit tax-wise/employment.I also would be paying utilities on the unit and would set up internet, etc for myself. Also I would under no circumstances rent out that unit or anything of the sort (like seeking profit for short term rentals or AirBnB). Its just that I probably would not be spending 7 days a week in Rhode Island.

Am I violating owner occupancy clause if I am only there 3-4 days of the week, and spend the rest of my time in NY?

My job enables remote work, but occasionally it requires me to be present in office and it is more convenient to stay at my significant other's place when that happens. The reason I am moving to Rhode Island in the first place as well is because my partner and I really enjoy it here and she is most likely going to move in with me there sometime in the future, either when I can work remotely 100% or if I find a suitable job in Rhode Island.

 Any thoughts or advice?