All Forum Posts by: Elton John

This is a good place to start and your plan will be overall successful, although there will be some stressful moments where you'll have to add cash to the equation. A year from now when you're ready to move and do it again the numbers will have improved slightly. In five years you'll wish you bought three or four in 2023. I recommend identifying yourself to your attached neighbors as the landlord's son or friend, do not be the landlord and the neighbor.

Do you mind me asking why shouldn’t I establish myself as the landlord ? Only asking because it’s easy to go online and find out who the owner of the property is. I might get exposed as a liar

0 Votes

Quote from @George Red:

Full disclosure I have never house hacked (I wish I was educated on the concept when younger) but being as you were previously paying $1,600 rent your PITI is just 1k higher and you getting the advantages of property appreciation, rent appreciation, built equity and tax write offs... sounds like better than renting. Congrats on landing the unit off market. Singles are valuable in the baseball game... sounds like you just started the game with a solid single, that may turn into a double/triple over time. It's a positive step so I see no reason to beat yourself up at all.

- Congrats

Thank you for the good words !

0 Votes

Side by Side Duplex Purchase Price $365K

B+ area

Negotiated roof to be replaced and property needs about $10k in cosmetic work.

Income potential $3.6 - 3.7k

PITI - $2.6K

Rent Vacancies - $185 (5%)

Repair & Capex - $460 (12.5%)

Trash, Sewer, Cold water -$100

NOI - $300 monthly or $3.6K annually for CoC of 6% if both sides rented.

I plan to live on one side, eliminate the rent I was paying of $1,600 and rent the other unit for $1800

The deal does not look bad even though margins are tight, but I'm just beating myself a bit as this was an off market deal through cold calling a motivated seller and I could have potentially lowered the price to $350k with some better negotiation. Right now I have a 6% loan, but if I can refinance that to 4.5-5%, then there will be another $250 in cashflow, bringing CoC return to 9-10%

0 Votes

Quote from @Andrew Postell:

@Elton John did you purchase this property with a loan? If so, what did the property appraise at?

They appraised it at $370k, however, I believe that appraisals stop evaluating once they reach the target. If i bought the property at $380k, it is likely they would have appraised it at the same value (380)

1 Vote

Quote from @Josh Young:

@Elton John that does look like a good first deal. Don't beat yourself up over the $15k that you think you could have negotiated down, you will look back in 5 years and that $15k will be insignificant. Over time rents will increase and you will be able to refinance also. When looking at a deal there will always be something you wish was better and there will always be a reason not to do the deal, but if you do your due diligence and the numbers make sense, pull the trigger.

Thanks for the insight

1 Vote

Side by Side Duplex Purchase Price $365K

B+ area

Negotiated roof to be replaced and property needs about $10k in cosmetic work.

Income potential $3.7k

PITI - $2.6K

Rent Vacancies - $185 (5%)

Repair & Capex - $460 (12.5%)

Trash, Sewer, Cold water -$100

NOI - $335 monthly or $4k annually for CoC of 6.7% if both sides rented.

I plan to live on one side, eliminate the rent I was paying of $1,600 and rent the other unit for $1800-1900

The deal does not look bad, but I’m just beating myself a bit as this was an off market deal through cold calling a motivated seller and I could have potentially lowered the price to $350k with some better negotiation. Just got too excited and agreed on $365k. Was too tires of renting and having all my offers beaten by all cash investors

5 Votes

Quote from @Bill B.:

It total insurance is still expensive but the $400k for $60 is about right. Again, you are 10x more likely to be sued personally than your property is, in which case this won’t protect you. Make sure your primary home also has 500k as that may extend out to protect you.

The “fear” is a car accident where you hurt or kill someone. Or an unqualified person is doing repairs for you and gets hurt/killed. It’s basically a success tax.

This will be my primary home as I am renting only 1 unit and living in the second. What do you mean when you say this won’t protect me when sued personally ? Isn’t the personal liability coverage of $500k dealing with that part ( me getting sued personally ) ?

0 Votes

Quote from @Bill B.:

If you are worth more than $100k, that’s not enough. If this is all you have and you have less than $100k in equity you’re fine.

It does seem like VERY expensive insurance. My average property is worth $500k give or take, and with 300/300k limits it costs under $800/yr. Maybe check your deductibles? I usually run $2,500 as you shouldn’t make a claim under $7,500-$10k anyway.

Yes, that is the part that’s covered by an umbrella which should also be very cheap. It’s advantage is is covers you, the person who’s much more likely to get sued than your property.

Ps. Many/most umbrellas require your base insurance to be $300k these days.

Thank you for your info- I called them and increased my personal liability up to $500K for only $60 more annually. Does that seem like a good deal now ?

0 Votes

Property Purchase Price - $365k

Dwelling ( Coverage A) - $432k

Increased Dwelling (Coverage D) - $108k

Dwelling Extension - $43k

Personal Property ( Coverage B) - $324k

Personal Liability eash occurance ( Coverage L) - $100k

Loss of Use - $130k

Total annual premium $1400.

I’m a bit worried about the personal liability being $100k as it seems a bit low. Is personal liability the coverage if I get sued ? Is that part the one that increases to $1M with an umbrella policy ?

Any info is appreciated

0 Votes

All Forum Posts by: Elton John

Elton John has started 4 posts and replied 11 times.

Post: Just closed on first deal ! Am I beating myself too hard on numbers

Post: Just closed on first deal ! Am I beating myself too hard on numbers

Post: Just closed on first deal ! Am I beating myself too hard on numbers

Post: Just closed on first deal ! Am I beating myself too hard on numbers

Post: Just closed my first deal. Thoughts ?

Post: Just closed my first deal. Thoughts ?

Post: Just closed my first deal. Thoughts ?

Post: Is this good insurance coverage or should I add umbrella too ?

Post: Is this good insurance coverage or should I add umbrella too ?

Post: Is this good insurance coverage or should I add umbrella too ?