All Forum Posts by: Jacob R.

@Andrew Herrig, I don't have homestead exemption due to purchasing it this year. The $627/mo is what I will be paying when my property taxes go up.

@Omar Khan, I may be able to raise rent slightly but not enough to offset the higher property taxes. 

Thanks for the feedback BP!

Good Evening BP,

I'll start with the expenses:

Mortgage (principal and interest): $1426
Insurance: $146
Property Tax: $218
Maintenance/Vacancy/CapEx: $326

Total Expenses: $2116

Currently I am living in one side and renting out the other which brings in $1125/mo. The side I am living in should bring $1125/mo or more when I eventually move out. I paid $290k and got into the property with zero down. With these numbers my cash flow is $135/mo.

This year the Dallas Central Appraisal District increased the appraisal by roughly 288%. My monthly property tax payment will go from $218/mo to $627/mo; clearly this will negate my anticipated positive cash flow.

I'm looking for opinions on what to do in this situation. Should I sell? Should I hold?

Ultimately, I learned a valuable lesson and tend to blame my naivety in addition to my eagerness to get into my first deal.

v/r

Jake

That makes sense @Andrew Herrig, but aren't you forcing equity into the house by remodeling? I guess if I'm honest with myself, I want a place to call my own where I can do an oil change in the drive way if I want.

@Robert Ikard Jr., getting roommates is definitely an option, but I'd like to analyze the property without counting on any.

@Andrew Herrig, I'd like to do something similar to option 4 with the purchase price being less that $150k. Can you expound upon why renting would be financially better for you? I realize it's specific to situation but I'd like to hear what you have to say.

@Anthony Dooley, do you recommend paying cash even if I intend to live in the property for the first few years? I'm trying to get out of renting and do more deals while I live in and rehab the first property. I'm thinking 20% down on the first property to have cash on hand for future down payments.

If I were to go the house hacking route, how important is it the other unit(s) pay my entire mortgage? Or should I only be worried about positive cash flow and ROI when I move out in the future?

Thank you all for the advice!

@Anthony Dooley, do you have any recommendations on rehab costs when back-calculating purchase price? It seems like a variable that's hard to guesstimate based on the varying conditions of properties.

@Steve K. , I am currently renting and would like to put that monthly payment into a mortgage. While fixing up the first property, I do intend to acquire a rental property and go from there. I am not opposed to the "house hacking" strategy but I have found it difficult to find multi-family properties in the areas I would like to live.

Good Evening BP,

First, I would like to lay out the scenario, and then list the questions below. Not sure if it matters but I'm a single male in Dallas, TX with a steady salary. I am planning on getting into REI, but first, would like to purchase a single family property for myself. I intend to live in the home for the foreseeable future (3-5 years). Ideally the property needs some TLC, and I will rehab it while I live in it with the plan of renting it out after 3-5 years.

Here are my questions:

• Does this sound like a decent plan?
• Do I run analyze the property in the same way as if I were renting it out right away?
• I have access to a VA loan, what are the pros/cons of putting no money down vs a down payment?

I realize these are pretty basic questions, but I want to make sure I’m thinking about the process in the correct way. Honest feedback is greatly appreciated!!

v/r

Jake