All Forum Posts by: Jacob Simpson

@Colin Wyatt You are correct that the CoC target will vary depending on the area. Since this is a house hack, you will be tied to the fates of your local economy (not necessarily a bad thing). I would take a 12% return on my cash all day long, provided I didn't have to invest huge portions of my time into it. But, I'm at a different stage in life!

Per @Brandon Turner's consistent advice: It's better to get started and do something, rather than get into analysis paralysis.

Or, as I always say, "Don't let perfect get in the way of better."

Congratulation on what sounds like a great family and a great first foray into REI! Best of luck!

@Colin Wyatt, if 12% still meets your criteria then I would agree with @Ryan Cleary, it looks like a good deal. You might want to consider your attorney fees as part of your cash investment for CoC calculation. If you don't need a lot of room you could look at living in the efficiency apartment and renting out the two big boys!

First impression is that it cash flows fine, CoC return is acceptable. You would be renting out two of the bedrooms, correct? Are you paying anything towards utilities? Your analysis doesn't show any costs for electricity, water, sewer. If your tenants are paying all of that for you, then no worries. I like that you used conservative percentages for Repairs & CapEx given the age of the home. Do you need property management? That would be an easy place to recuperate some cash.

@Colin Wyatt, you mentioned that the 1BR unit may have some legal obstacles to clear. Has someone advised you that this is something that you shouldn't have any issues clearing up? What does it do to your CoC if it can't be resolved?

I would typically include your closing costs into your CoC calculation, unless you are rolling that into the loan. Using your 4K closing costs that would have your CoC numbers at 9.2% and 14.6%.

In addition to Zillow and Rentometer, reach out to a local property management company and ask them for a list of properties that are available for rent. Use those as comps for your deal and see if your value-add makes sense. If the rent side of the deal doesn't make sense, that might be leverage to work on the purchase price!

My wife and I have finally agreed that we are going to wade out into the REI waters. Still in the learning phase right now, listening to BP Podcasts, reading articles, etc. The good news is that we have zero debt and own our home, so we've got some equity that we can leverage early on. We want to start with some small deals and increase as our knowledge and comfort levels increase.

Our current thought is to flip 2 or 3 homes in a row and then purchase a buy & hold property, then repeat that process. Thoughts on this approach?