All Forum Posts by: Account Closed

Depending on how much equity you have in the property (you didn't say what you owe on it), it might be worth doing a 1031 exchange into a rental property WITHOUT an astronomical HOA fee (mine for my SFHs are only around $20 per month!) and in a location where you can still meet the 1% rule (meaning if the value of the property is $276K, you would want to get $2760 per month in gross rent). I hear that you can't meet the 1% rule in Austin anymore, but possibly still can in Houston. I can't meet the 1% rule where I live, so I invest out-of-state so I can cash-flow.

If you sell it and don't buy another like-kind property, you will want to consider the tax effects when you are calculating what you will walk away with.

Good luck!

Hello! I, personally, am a SFH investor, not multi-family, BUT I believe the same "rules" would apply with respect to cash flow... Generally I go by the "1% rule" when I am looking to assess a property--meaning that I want to get 1% of the purchase price in rent. So, in this case, if I'm paying $199K for the property, I want a total of at least $2,000 in monthly rent. Property management is generally 8-12% of gross rent, so once you take that out, plus your PITI, and reserves (I use 5% of gross rent for vacancy and another 5% for maintenance--I've seen Brandon use these percentages in the BP calculator too), you won't have much, if anything, left over for cash-flow with just $1500 in gross rents... UNLESS you think the rents are currently not up to market rate and you can raise them...?

I live in a market where I CANNOT buy property at a price where I can get 1% so we buy investment properties out of state. :-)

Good luck!

You may want to go back through and listen to some of the older episodes of the podcasts--Brandon and Josh interview LOTS of investors who "house hack" (buy multi-family and live in one unit, or rent out parts of the their SFH) with GREAT results. You could also search the blog posts because I think there are a number of articles out there about house hacking too that you might find really helpful!

Good luck!

In my opinion, it would be a good idea to have 6 months of PITI (your mortgage payment) set aside in case of emergency for your primary home. Once you start getting investment property mortgages, there will be required reserves that the lender will calculate for you.

Good luck with your first purchase!

I have closed on two investment properties with First American and one investment property with Fidelity. All three have gone smoothly!

Good luck!