All Forum Posts by: Devin Chong

@Brie Schmidt

@John Warren

Thank you both for the clarification!! Will keep this in mind as I look for my next property.

I am looking at a triplex in Seattle WA that I had planned to buy as an owner occupant. It is currently listed for $820k, and gross monthly rents are roughly $4300/mo (way under market value). FHA with 3.5% down, PITI would be $4477/mo, however FHA requires that 75% of gross rents be above the monthly PITI. The monthly rent income would be determined by an appraiser, but would need to be roughly $6000 in gross rents to qualify. This criteria is in place to help ensure I do not default on my loan.

I have heard this is not the case for duplexes only triplex and above. If I go the conventional loan route, I will have need 15% minimum down payment. Does anyone have any alternative solutions or loop hole to having 75% of gross rents be above PITI?

Thanks in advance! 

Hi @Jon Crosby, you are right. This is not a normal BRRRR. More like a house hack with light rehab and refinance. The property will not make money, I would ideally have a roommate to help me split the mortgage. If I rented it out completely, it would break even based on market rents for the area. The upside as I had mentioned is the new public transit line being built today 2 blocks away expected to open next year.

I need a place to live, and by doing some of the rehab myself I believe I could acquire this place with no money down once it is refinanced.  

I did go look at the property myself today, there seems to have some structural issues.  Cracks along structural beams, the floors are not level and the ceiling has shifted.  So the 20-25k budget for rehab is no longer feasible. 

Thanks for the feedback!
 

Hi All, 

Would you BRRRR a 2 bedroom condo unit for your own personal residence, if at the end of the day you break even on cash flow from current market rents? The positive note it is less than a quarter mile away from future transit rail lines expected to be completed in 2021. It is a 1979 build that simply has not been updated.

Property listed: 315K 

Expected ARV: 420k (2 years ago I walked through a unit with the same floor plan in the same building that sold for 415k, units still sell today around that price)

Expected repair cost: 20k (I can handle majority of the cosmetic repairs myself)

I would put in an offer around 285k and hope to close around 295k.  What are ya'll opinion? 
 

@Brian Hughes Thanks for the input.  I am looking for an alternate solution to hopefully stay away from having to make those high environmental standard improvements or keep one of the units reserved for section 8. I will double check to make sure the property has 3 separate electric meters.  

@Christian Nossum I agree, the process seems backwards! I just inquired with the permits office today for alternative options.  I will let you know if I find out anything else.

Hi All, 

I have been looking at a Triplex in Seattle very close to where I currently live that would allow the potential to house hack.  It is listed as a Triplex, however might be considered as a Duplex by the City of Seattle. Does anyone have experience changing a Duplex into a Triplex with the City? Is it a difficult process? Should I even bother?

I have inquired with the listing realtor about the property and here are the details: 

• We believe the property has been used as a 3-unit building since roughly 1953 (prior to the City of Seattle annexing the area).

• Unfortunately, it was not continuously used as a triplex (the triplex use was apparently interrupted in 1971), so it was established that it would not be grandfathered in and no longer be considered a legal triplex by the city (even though the County records designate it a triplex).

• Property records obtained from the City of Seattle Permit Center are available upon request

• It is currently considered a legal duplex by the city.

• After meeting with the City of Seattle Permit Center, it was found that there is a path to getting three rentable units without an owner occupancy requirement:

• The owner would need to file a building permit for a change of use.

In order qualify, the owner would have to do the following:

• Change the use to a SINGLE-FAMILY home with two accessory dwelling units ("ADU"). Duplexes are not allowed to have ADU's.

• Because of the age of the house, there are no restrictions to how large the ADU units can be. The current configuration of two units that are roughly the same size, and one smaller unit, is apparently OK.

• One of the ADU units must either be built to a high environmental standard OR must be reserved for low-income housing. The property would need to show that the units meet safety standards (ingress/egress, etc.), but we understand the paperwork is otherwise fairly simple.

▪ The review time is about 2-3 months once the application is submitted.

Any feedback or input is appreciated. 

@Alyssa Dyer Thanks for the recommendation! 

@Eric Veronica, yes I confirmed with my current lender that was with a 0 point rate.  I'll PM you

@Remington Lyman good tip, I'll make sure to inquire with other lenders ASAP.

@Harvey Yergin IV thanks for the recommendations! I will reach out to both of them.

@Aston Levarek I was pre-approved with a local Ohio bank.  Unfortunately the lender I like working with here in Washington is not licensed in Ohio. I will do some more research and get a few more quotes.  Thanks!