All Forum Posts by: Jeff D.

Hi Folks, 

I'm looking to purchase my first 3/2 duplex for around $275k. I plan to occupy one of the sides for the first year and already have tenants for the other side who will pay $1300 per month (tenants will cover their own utilities). My side of the unit will be shared with two room mates who each pay $500 per month + share of utilities. Most of the big ticket CapEx items have been taken care of (roof, furnaces, AC units within last 5 years).

Question is, when calculating operating, CapX and debt servicing, am I looking at the numbers correctly? 

Here's what I've included for operating expenses: 

• Property Taxes (2.4% of Property Value in Austin, TX)
• Property Insurance (.5% of Property Value)
• Property Management (10% of gross per unit rent after year 1) 
• Utilities (less than $50/ month - split with room mates)
• Repairs (10% of monthly rents- should this be a percentage of property value or a percentage of rent). 

Outside of these items I'm planning to use an FHA with 3.5% down. This will require PMI, which I'm guessing with come with a .85% rate (is this based on credit or fixed at same rate for everyone?).

Finally, I plan to keep $5k in savings for CapEX. I'll add $1200/ year to this and keep saving. Is this enough? How do you guys calculate / keep money on hand for this type of stuff? 

Thanks in advance for your feedback.

Barbara, Aaron, and Will - 

Thanks for your feedback. I've looked at a few properties listed on MLS, but they don't make sense give my budget/ constraints and model.

As you've pointed out, I think the best way to go is to find something that needs some work and fix it up in the areas I'd like to be and then run the numbers. 

On the FHA suggestion- definitely something I'm interested in. I may look at the 201k loan - as this would enable me to make repairs and possibly improvements that negate some of the risk of owning an older property.

Will & Aaron- I may reach out to you guys when I'm back in the States next in the next few weeks. 

Way to go guys- 0-45 is quite a leap. All the best in your new venture!

Hi All, 

I've been following BP for some time now, but only recently joined. This is such wonderful place to come and learn- thank you all for contributing to the education that can be found here!

Here's the situation: I'm looking for guidance on investing in my first property in Austin, Texas around the July/ August time frame. Objective is to purchase a an owner occupied 3/2 duplex or triplex, with a 75-80% ARV (for under $325k; financing 80-85% via conventional mortgage via portfolio lender), in South (north of William Canon) or Northwest Hills of Austin, Texas that generates enough rental income to pay my mortgage, taxes, and expenses enabling me to live rent free for a year and then cash flows positive the year following (so I can purchase my next property). I'll be renting out one side and living in the other with 2 room mates (each paying $500/ month).

• First question: Given my objective and the rather hot real estate market in Austin, are my expectations realistic? 
• Second question: I travel extensively for my full time job. I'm often out of the country for weeks at a time. For those of you in a similar situation- how do you manage the needs of your property and tenants while living/ traveling abroad- is this doable or am I setting myself up for failure? 

Thanks kindly for your responses. 

- Jeff D.