All Forum Posts by: Cody Hall

Well, I ended up buying a duplex for 188,000. A bit pricey. Each side is 4 bedrooms. The side I'm occupying has 1.5 baths and the renter's side has 1 bath. My side has an inground pool with a hot tub. Not a fan of pools, but makes it really unique around here.

I moved in on Halloween. My side "rents" for 1150 a month, and the renters side is pulling 1000. My mortgage is 1250/mo with 3.5% interest. I ended up paying 3.5% down and 1.5% closing costs! However, I set up my payments to be bi-weekly and an additional $200 a month. Should be paid off in 19.8 years versus 30 years.

So far the dishwasher has blown up on us during dinner. We had a major windstorm that blew down our fences along with the majority of our town's. 75mph gusts..

This weekend I'm updating some electrical with my buddy. I figure in 3 months I will have it painted and floors done. I'm super stoked to have everything come together. I'm saving up for the second purchase right now. I need $15,000 to purchase my second duplex.

Appreciate your reply. Luckily I have done framing, drywall, and hvac. All of my buddies are electricians, hvac or in construction so I should have a decent hook up on remodeling. I'm not talking major renovations. I might bust out a wall to modernize a kitchen. But most of it is going to be paint, trim, commercial hardwood flooring, new appliances and stuff like that. I don't want to dump so much money into a place people will tear up. Just enough so that I can rightfully raise rents. I have to agree, I hate painting.

Space for tools would be awesome. I currently rent a duplex from a friend's grandparents. I figure two more years of stuffing tools in an extra bedroom is worth starting a real estate career. Someday I'd love to have a nice shop.

It is easier to find SFH's over here as well. Theres about 12 duplex/triplexes for sale on the MLS that are under 180K. There are hundreds on the MLS that are under 150K for SFH's. The only downside to a SFH for me is that I can't use projected rental income to help boost my loan amount. And I also can't rent it out if I'm already living there. I feel like a duplex is a good idea because I can rent out the other side and then in 2 years use the income as a way to put me in a better spot for buying another house. I understand sticking with the 3/2's. That's a good idea. The only problem over here is that either the houses are really old, or they are really torn up for my price range. I'd love to find a foreclosure. But haven't had any luck.

How do I find foreclosures? And how do I get into auctions? Do I have to be preapproved for an auction? Say I have 15K to play with and my approval is 100K for a SFH. I've never been to an auction and I can't think of anyone I know who has. Luckily over here most duplexes are spread out. Yeah there are some streets littered with them. But for the most part they are surrounded by SFH's.

Good point about limiting resale. I hadn't thought of that. I'd rather get rich slowly than work an endless 9 to 5!

Thanks again

Thank you for your replies! I'm sorry Mike. The first property was a duplex at 115,000. The second was a triplex at 160,000. And lastly the third is a large duplex at 169,500. That seems like sound advice. Do you think it would be better to renovate and sell? Or hold and rent? I've heard plenty of conflicting info here. My realtor's name is Mike P.

Yes, I work quite a bit. I am stretched thin but I think now is a good time to power through it. The sooner I can build wealth the better. All of my friends are going around having kids and getting wasted through school. I don't plan on being like everybody else. I'm not looking to become a billionaire, but I don't want to work a typical 9 to 5 job til I'm 70 either. I will research the different rentals and the 50% rule (haven't heard of it). You are recommending sourcing out renovation because of how busy I am, or for another reason?

I haven't been able to find any 4 plexes for sale around here. Rentals don't stay on the market very long. We have a lot of out of state workers that are working government clean up jobs at the nuclear facility. So people tend to hold on to what real estate they have. So far the only one that seems smart to me is the triplex on the mls listings. For 160,000 the rents would be about 1200. Breaking even for the first two years, moving out, and renting the whole thing out.

I appreciate your help Brian. I will absolutely keep researching. I'm not taking any of this as criticism. It's all helpful to me.

I have read online on other forums that it's a good idea to start flipping houses first to build a nice chunk of change to reinvest. Is it better to buy smaller, cheaper single family homes and renovate them? Should I stay away from FHA and put up the conventional 20% (I only have 16-17K) on a more inexpensive home? If I do FHA I have to remain in the house for 2 years. If I did it conventional the maximum I could qualify for is a 80,000. But if I stick with a duplex I can get a higher loan because I can use 75% of the expected rental income to boost my limits so to speak.

I'd love to be the guy to pick up a house for 50,000 and turn around and sell it for 100,000 a few months later. But my only "in" around here seems to be mls. There isn't a REI group that I'm aware of. I read that some of the best deals are found through other investors. I'm just not sure how to find some around here.

I don't want to get caught up in just buying a single family house and making payments every month. I want to use real estate as a means to support myself and my dreams.

Also if you're around Eastern WA feel free to shoot me an email. I'd love local help!

My names Cody, I'm 20 years old and I plan on getting into real estate. I'd like to start with a duplex on an FHA loan. I will live in one side since it's an FHA. I've been snooping on this website for years and now I'm finally about to get started (excited!). All of the wealthy people I know started in real estate. I'm in school right now and frankly it's not doing too much for me. It's more of a bill than an education. I currently have 5K in the bank. I have a truck payment of $223 a month. The truck is valued at $24,000 and my balance is $12,000. I just put the truck up for sale. So shortly I'll have about 16-17K in the bank for a house.

Since it's FHA I only need 3.5-5% down. I have to live in the house for 2 years. And the nice thing about it being a duplex is I can use projected rent as income in buying the house. Ie, if one side would rent for 600 then I could apply 75% of that (450) to my gross income. Since they only use your fulltime 40 hours a week gross income that really helps. None of my overtime or 2nd job helps. My gross is 1600 a month. But I am headed to a new fulltime job in the neck week or so. It won't be a huge jump. But my gross will hit 2000 a month. Plus I get full dental and medical as well as a work truck. Raises come a lot quicker at this company as well. Although switching to a new job will slow me down because I have to wait for 2 paychecks to verify income, I feel the raise is worth it.

My credit is about 710-715. I’ve talked with 4 or 5 lenders. The most recent said that with 17K in the bank and with my credit getting approved for 160,000 duplex shouldn’t be a problem at all. All of my work experience is in construction. I work 50 hours a week doing construction and an additional 20 hours selling guns and working on archery stuff. I only plan on using about 10-12K maximum and keeping the rest as an emergency fund.

The lender said I would get a 3.75% interest rate on 30 years.

I don’t understand the ratios and such that you guys are using. There are about 3 properties I’m interested in.

The first one is http://www.windermeretricities.com/property/10983189/1352_S_Washington_St._Kennewick_WA_99337

They’re asking 115,000. The neighborhood is okay. I saw one side of it for rent on craigslist at 595 a month. If I put 5% down (5750) with a 3.75% interest rate on a 30 year note my payments should be about 672 a month. I put 1000 in property taxes and 1000 in insurance per year. I know that’s right in the ball park for property taxes, but I am unsure about the insurance and how it’s calculated. Can anybody help me here?

I could rent one side at 595 while I renovate my side. My Dad owns a multi-million dollar construction company. So a big perk will be getting deals from him on materials and equipment. And no, I don’t work for him. I plan on renovating Side A while renting out Side B. After Side A is renovated I’ll switch and renovate Side B. I have to stay in the place for 2 years. So I figure a year per side. A lot of sweat equity should equate to higher rents and a higher value.

The 2nd one is a triplex
http://www.windermeretricities.com/property/14508317/208_S_DAWES_Kennewick_WA_99336

With 5% down (8000) and at 3.75% with 1000 for insurance and 1000 for property taxes my payments will be 870 a month. This triplex has two 2bd/1bath units and one 1bd/1bath. The two bigger units rent at about 600 a piece, and the smaller unit is closer to 450. Instantly I can see I have a lot more cash coming in from a triplex than a duplex. The house is in good shape it seems. It’s in an awesome location right across from a school. I feel like it’s a very safe neighborhood and in a good part of town. It’s been on the market about 2 months.

The 3rd one is much larger than all the others
http://www.windermeretricities.com/property/14223762/1103/1105_Marshall_Richland_WA_99352

Big floor plans in a central location. These rent for about 800 a month. With 5% down my payments would be 912 a month. Negative cash flow just like my first duplex. Should I be okay with a negative cash flow for the first two years? After two years of owning it I plan on jumping into another duplex/triplex and renting out all of my original purchase. Should I even put 5% down? Or should I go as low as possible with 3.75%? Then again should I throw as much money as I can at my down payment (6-10%)?

When I plan on renovating whatever I buy I will be doing a full-run through. Kitchens, bathrooms, fixtures, appliances, etc. Is this the best method on a duplex? I’ve heard a lot of horror stories of landlords just patching problems. Do you typically try and renovate the house to be “idiot proof” somewhat? Rounded corners, easy to clean laminate and commercial hardwood. Neutral colors, simple landscaping.

I plan on paying for lawn upkeep, gutter cleaning and stuff like that.

I really appreciate any help. I can see I didn’t ask many questions. Unfortunately there isn’t any RE groups where I live. The closest one is an hour and a half away. I’m really looking for experienced opinions on what the smartest option is. I think real estate is a lucrative business to get into. If you work hard enough the possibilities are endless. Where I live is expanding and developing at a rapid rate. Hanford nuclear facility is here. There are tons of renters looking. Just looking to get my foot in the door and start as strong as I can. Thank you!

Cody