All Forum Posts by: Jake Walroth

Hey all new investor here from cincinnati, quick question regarding my circumstances with my FHA loan.

Just purchased first duplex- using fha / househacking

Purchase $176.5k

Rents

1 bed (my unit) 1400sqft - $850/month

3-4 bed 2 full bath 1700sq ft - $1500-1750/ month

Separate utilities

$50/month laundry

Situation

My work takes me out of town mon-thurs every week. Knowing that I spend 175+nights in hotel rooms, would I be able to charge rent to a tenant/friend and pretty much just use it as my mailing address/ have a futon and crash there on select weekends?

As soon as my 12 months are up I'm going to refi and try to house hack again.

Thoughts?

Is this mortgage fraud or am I towing the line. Keep in mind I'd have all flight and hotel receipts to prove I'm out of town and I would hate not to charge buddy good rate use while I'm gone. 

@Andrew Johnson it's not a college town per say, it's Cincinnati, OH. The property is near the University of Cincy as well as many of the major hospitals in the area. I understand the benefits that come along with renting to Med Students(its one of the reasons I bought the place). I also think it would be reasonable for them to find another roommate, thus not increasing their rent. More to it, this is actually a 4 bedroom unit that the prior owner has always marketed as a 3 bedroom because as a 4 bedroom is would be a little crowded. I just hate the idea of taking $500 less than market rate. My mortgage is $1296, so giving the prospective tenants a $500 discount goes from me receiving $200/month to me paying $200-$300 out of my pocket for mortgage. 

So I purchased a 2 family. I am going to live in one and rent the other unit out. 

Here is the breakdown. 

Owner has Med Students set up to rent 3bed2bath for $1,000 beginning in April-July 2018, I close Feb 17 of '17. Normal monthly rent is between $1250-$1500/month. The owner was going to be doing some work on unit while they lived there, also there were only going to be two people living in the unit instead of 3. Legally, I don't have to honor the contract. I'm tempted not to honor it, especially since it will be a year of well below market rent $. 

MY plan. 

Talk with the two tenants, have them find another roommate and charge $1500/month. This seems reasonable to me. 

My Fear

Most med students and other potential students will have signed a lease for that year. I don't want to run risk of having no tenants for a prolonged period and being on the hook for the entire mortgage. 

Any advice will be greatly appreciated. 

Thanks,

Jake

I was able to find a two family beautiful old Italianate home in Clifton for $176k. 2nd and 3rd floor make up 3bed2bath(rents for $1250-$1500)-has been rented to med school students/hospital employees for the last 20 years. Only has had two owners in the last 60 years so it's been well maintained. I'm going to live in first floor 1bedroom (rents for $700-$800) for a year. I went with FHA loan as I'm going to use this as Investment property, and It allowed me to keep more cash on hand to make another purchase or two this year.

Jake

Hey guys, 

I just bought my first Investment property in the Clifton area. I'm looking for more investment opportunities(multi-families) in Oakley, Northside, Covington, Walnut Hills and a few other neighborhoods. I'd love to get together and connect with any of you whom may be interested in teaming up or just sharing ideas, strategies, etc on this type of investing in Cincy. Unfortunately, I have to get on a plane every monday for work and am usually in Cincy Fri-Sun. If any of you would like to coordinate a "meetup" I'd love to learn and share some ideas with you guys. 

Jake

@Joseph Cornwell Yea, it's by and large been a Med School rental or people working at the hospital. Not looking to deck the place out, but I definitely want to improve the quality of appliances where I can and do some light cosmetics in kitchens and bathrooms. 

The cashflow I anticipate is a little high, but I also know the prior owner had room to up rental price but hasn't in place of securing long term tenants. Also, I am planning on some cosmetic upgrades as well as bathroom and kitchen moderate upgrades. After doing some research with a lot of my friends who live up there as well as zillow and the like, I'm confident I can get $1500 for the 3 br and $850 for the 1 bedroom when I move out. That'd be a mortgage of $1200 or so.... and if I can build some more equity into property prior to refi that should reduce monthly mortgage even more. 

Thanks for the feedback Sam. 

Jake 

Hey guys, 

First post here on BP... I've been reading and trying to edumacate myself on here though for a while now. Figured I'd layout my first purchase with some questions... any and all comments/suggestions are welcome. 

I just bought my first two family. It's a lovely restored Italianate home from 1892 in the Clifton/Corryville area of Cincinnati near the University of Cincinnati as well as all of the hospitals. All utilities are all separate. All hardwood Floors. High ceilings. Nice quaint little backyard with fences for some privacy. I'll live in the 1bed 1 bath on first floor. The 2nd and 3rd floors make up unit #2 which is 3 bed(could be 4) with 2 full bath. 

Please let me know your thoughts on deal and my questions..

Bought for $176k 

2 family

I pay water

All other utilities separate

May need light tuck pointing on one side of home. 

3 bedroom 2 bath rents for $1500/month

My mortgage is $1296/month(going to refi after 6 months dropping it down to closer to $1200/month)

1 bed I'll live in rents for $800/month

So when I move out, Cashflow will be somewhere in the neighborhood of $800-$900 month. 

Obviously its an older home(1892), its been kept in fantastic shape though.... but I know it will require some $$ for fixing at some point. 

My questions

With this being an older homes... what are the key things to watch out for in regards to the guts of the home to limit my costs(Brick and Mortar? Roof? etc)?

It's got a great backyard.... has anyone ever tried charging more for access to a backyard? If so, how to price?

Its got separate washer and dryer in basement for my unit and my tenants.... what to you guys charge for access to this? Is is %of rent typically? Or just like $50/month?

The condition of the home is great, however I am going to upgrade my unit while living there. Any suggestions as to where I should invest some RENO money to improve the rental cost as well as eventual resale value? The fixtures in bathroom and kitchen are in good shape but outdated... this is where I figured to invest some money. 

Lastly, any local Cincinnati investors with some insight as to the Clifton/Corryville markets? I love where this home is at(previous owner has rented to med school students for 20 years)- close to UC, Short-Vine, Hospitals, and new Kroger---- is there reason to believe this property will be appreciate at a good rate. I love Clifton... UC has added 10k students in 15 years and on pace to do same in the next 15 years...and there isn't much room to build up there so I really like the area for those reasons. 

This was a little stream of consciousness, but I appreciate whoever got this far for baring with me. Any feedback is much appreciated. I'm looking to get another property the latter half of the year and want to continue to get into the RE game. If any Cincy people are on here I'd love to connect.

Thanks, 

Jake