All Forum Posts by: Nikolas W.

 Thanks Drew, will have to play around with the calculator some more after I upgrade to Pro!

Thanks Kyle, and I responded to your PM, looking forward to chatting! I was calculating both ways but wasn't sure which one to give more weight to. Good to know it's common to see a negative cash flow if I'm occupying one of the units. I agree that the other units probably aren't updated, it seemed like the range of rents was pretty wide too.

Those are basically my first impressions about FHA vs conventional loans as well. I don't love the idea of paying PMI or extra fees, and the first lender I've gotten pre-approved with doesn't even do FHA loans, although I would probably shop around before committing to a mortgage anyways. But I guess paying PMI could be worth it if I was investing the other cash somehow (a second property or maybe stocks?) with good enough returns... curious if any diehard FHA loan supporters have thoughts?

Hi Dave, thanks for the suggestions -- I'll add that book to my reading list. I agree being conservative is prudent; an example I read on the forums here which really drove that point home for me was if you can't cash flow while budgeting for a property manager then every time you buy a new property it's like you're buying a new job as well. Even though I want to start off by self-managing my future property if possible, so I can gain experience and some extra income, the dream is to one day have enough properties that I would want to outsource the property management aspect.

I was discounting the cash flow based on income not coming from my unit, yes. All of the properties I looked at would cash flow positively if I were paying rent myself, so it's good to know I won't have to stumble upon the deal of a lifetime to find a good investment!

I'm just starting to research REI and looking for suggestions on books or other resources I should consume. So far I've been watching https://www.biggerpockets.com/... and started reading "Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties". Are there any "must-read" books people would recommend to a new prospective investor?

I'm most interested in buying a duplex or fourplex as my first property so I could house-hack. Since I'm inexperienced I'm inclined to look for a turnkey property, but maybe I should be considering rehab properties as well?

Because I work remotely, I could invest in potentially any area of the country, although I've been mostly looking at Saint Louis, MO since it's a city I was already considering moving to. I have ~140k that I could put towards down payment, closing costs, etc, and it seems like that's more than enough to get a fourplex in STL. Some recurring advice I've seen in the "Intro to REI" videos and in the forums is to be conservative when estimating expenses, and I'm finding that makes it difficult to make any property cash flow, especially if I'm living in one of the units.

For example, this fourplex: https://www.zillow.com/homedet... is only 250k (which is so much lower than most other fourplexes I've seen that it seems like there might be some additional due diligence required). But at face value, the three currently rented units produce $2095/month in net income, so it seems like the cash flow could be great, but then when I plug everything into the calculator tool on BP with 8% vacancy, 10% property management, 10% cap ex, etc, I actually end up with a negative cash flow. Granted, even if the cash flow is -$200/month, I would be living rent-free as an owner-occupant and I would be gaining equity as the mortgage was paid off, so maybe it's possible to have a good investment that doesn't cash flow? Or is that phrase an oxymoron?

Something I found odd is the calculator's projected cash flow seems to improve over time. Is that because the calculator assumes rents will increase over time?

Lastly, are there resources about FHA vs traditional mortgages in terms of expected returns? Since I'm planning to owner-occupy, I initially thought a FHA or other small down payment mortgage would generate the best returns, and after reading a few forum threads it seems like that's what people usually recommend. It makes sense, and a small down payment would leave me with plenty of cash reserves, probably even enough to be ready to put a down payment on my next property when I felt ready. But if I'm already at a negative cash flow with a traditional 20% down payment, a FHA loan with PMI and higher principle payments would make my cash flow even worse. Any thoughts on this?

Thanks to anybody who takes the time to reply! I'm hoping to learn as much as I can and it seems like this is a good community to be part of!