All Forum Posts by: Farrukh Amini

Very well said! @Ryan B.

Due to the nature of the topic we’re discussing I feel like I need to state that this is not an investment/financial/professional advice. What I’m presenting here is for informational purposes only, to give you an idea of what metrics we look at to run our numbers. It is your full responsibility to evaluate merits and risks of your investments.

So, based on the data you provided below is a possible scenario. Keep in mind that these are not the exact numbers you’ll get because you won’t know the rate of your loan until your lender assesses your situation. The utilities and home insurance can vary greatly. I just used a rough estimate for home insurance and utility expenses based on my experience.

Monthly loan payments: $2496

Monthly expenses: $683

Monthly income: $3100

Monthly cash flow: -$79

You’d be negative cash flow paying about $79 out of pocket but living for free and building equity on the house. I don’t know what your goal is with this property but that’s roughly what you’re looking at.

***Here’s how I came up with the numbers above:

Purchase price $539k

0 down

I just used an Interest rate of 3.75% here as I have no idea what it could be for you (could be lower or higher, depends on your credit, etc. but a quarter point difference in rate adds or reduces your loan payments by about $90/m)

Estimated $10k for cash out of pocket (could be less or more coz I have no experience with VA loan closing costs. Also assuming the property needs no work besides possible paint job here and there)

Based on your rents you’ll be grossing $3100 from the two units and live in the basement yourself.

Figured roughly $680/m in expenses (annual: $4.5k taxes, $1.7k home insurance, $2k water/sewer for the building and your own gas/electric)

Again, this number could be very different and you won’t know until you shop for a policy and look at the current residents’ utility bills.

Hope this helps.

Hard to analyze without all the info. If you post all the details I’ll be happy to analyze it for you. Need to know annual taxes, number of units and how many beds/bath per unit. I can estimate insurance and other costs. 

I’m not sure I understand you correctly. Is this just two units with total gross income of $2100? 

Here’s an overview of his numbers: he got it under contract for $425k only because the house has a mother-in-law unit that can rent for $1k/m. Got tenants with leases already in the other two units with $1.5k/m each. Gross income he’s looking to collect is $4k/m. He went with a debt service loan (higher rate than a conventional) so his loan payments are a bit higher. Did 20% down. Closing costs estimated at $13k plus estimate for finishing the bonus unit about $12k. His taxes, insurance, and water/sewer liabilities are roughly $700/m (5k taxes 2k insurance, 3.2 water). Now this is not a house hack so his net is about $1k. Had he househacked and lived in that bonus unit himself he’d be still pocketing roughly $700/m plus live for free. 

Like Dan stayed above, It all depends on how much you end up paying for your loan every month and how much are able to collect for rent. Generally, without even looking at your numbers or area, I can tell you that at that price point you’d need to get close to 5k in rents for the numbers to work as a house hack. I just helped my friend get a property under contract in Greenville area as his first investment property and I’ll be happy to share details so you have an idea. 

When we were doing an oil tank sweep on the last property we acquired the company we used offered to do a drill and probe which wouldn’t disturb the cement too much. It was an additional $250. 

Amazing event @Alina Trigub !!!

Thank you for putting this together. It was surreal to not only meet @Matt Faircloth but also get a signed copy of his book 🤩 

I lucked out tonight!

It was great meeting you too @Lewis Schwartz !

Good luck with your next house hack search, and feel free to reach out if you have any questions. 

Can't wait for this one!