All Forum Posts by: Jared Stroebele

You have a good salary which means your time is worth a lot.  If I was in your shoes I would look into a turn key provider out of state and buy some completely passive income.  The best place to invest is not always in your back yard. Clayton Morris was on podcast 151 and runs a turnkey investment company that sell 40k homes with a 10% return (or something like that).  A few houses and you may be looking at some substantial mailbox money. Morris Invest is just one example there are many others that would be easy to contact through BP. 

You may get better returns on your money investing and managing in your back yard but probably not a better return on your time.  

@Lathan Cram 

I want a side by side duplex with all separate utilities or the ability to easily separate them and the numbers must work. Most of the multifamily I see near me are up-down conversion, in less desirable areas, or are going for more than I am willing or able to spend. I am actually starting to think I am being too picky about the property but with an FHA loan I have to live there at least a year, I should like it even if it is not permanent.  

I came up up with a list of must haves, and nice to haves(mixture of property features and income numbers (cap rate, cash on cash, cash flow, etc)). With that list and a mortgage preapproval I feel ready to make a move should an appropriate property come up.  I am anxious to get started and will probably rework my list in late January if I still have not found something.  In the meantime I will keep looking and learning. 

Hi welcome to BP.  I have been looking into house hacking for the last 4 months or so.  I have not found the right property yet to jump in but I'll try to answer your questions based off my research. 

1. Yes you pay both. You will have your Mortgage insurance payment and your landlord/property insurance. 

2. That depends on your risk tolerance and emergency fund, but I would say no. You should be able to afford it yourself.

3. Use everything available to you CraigsList, Zillow, Rentometer, and  your realtor using those resources you should be able to nail down an accurate range.

4. Um this one I do not know for sure. I am guessing it is the same places that our 2% and 50% rules breakdown: Big cities, and popular coastal areas.

Congratulation on your first deal. Happy house hacking

If you are already working as a contractor I would strongly recommend going to local Real Estate Investment groups.  Market yourself and your skills there.  Get some more contracting business, investors are always on the lookout for reliable people who do quality work.  Try to find a partner, if you can contribute time, network, and skill and your partner can put in money you both can share in the returns until you can branch off onto your own.  

Would you consider sharing the details of your deal once you close? 

I have been looking at small multifamily in Davenport but nothing that fits my criteria has come across my plate.  I think I need to make some changes to my requirements, but I am curious what can be found in the area.  

I am looking at purchasing a multi family to house hack and have enough for a 3.5% FHA down payment, but I have read a few references to down payment assistance grants by the state of Iowa. An extra free $1000+ from the state sounds amazing. I was on the Iowa Finance Authority website but all I got from them was that it exists and has some restrictions not how to apply or what needs to be done in order to take advantage of the programs.  So i guess my questions:

Is this something my mortgage broker should be telling me about? 

How do I take advantage of these benefits?

Can someone explain the process? 

Where should I start?

The government is a real-estate investor's friend and if it is offering better financing or free money I do not want to turn it down because I lack the knowledge.  Thank you all in advance for your help. 

Hi Deborah,

It is great of you to reach out and I hope BP will be able to assist you, but we will need a little bit more information in order to really help out with this deal.

• What do your current finances look like? Do you have enough savings for a down payment and rehab? 
• How do you plan to finance the building and the subsequent renovations?
• How much will the renovation cost? 
• Are any of the units currently occupied? what is the current rent? market rent?

Multi use buildings are usually not recommended for new investors.  Mastering residential rentals can be difficult enough without trying to understand commercial at the same time.   I am not saying it can't be done but you will really want to nail down these numbers, and asking here is a good step to doing just that.

I am planning on checking with the local utility companies to get actual numbers after I get the pro forma numbers.  If there are serious discrepancies I can either see that at leverage to lower the price or encouragement to walk away.

I am interested in house hacking mostly because I have taken the time to prequalify for an FHA loan. This makes any cash on cash returns look great with only 3.5% down. It also increases the mortgage payment when compared to the standard 20% down decreasing cash flow so there is give and take.

I am having difficulty finding any properties that cash flow significantly once I factor in losing a unit to my occupancy.  Do you have any advice on finding better properties? Is it okay to put my allocation to property management into cash flow projections while I am living there and managing? I would of course run a second set of numbers projecting cash flow with management for when I move out.

I have been lurking on the forums and looking a real estate near me (Davenport, IA) for a few months now.  I have a steady job(60-70k yearly) and a good credit score(730).  I barely spend any time at my apartment currently, because I am always at work. However, I have experience with basic home repair have ties to construction companies near me and can easily work flexible hours if required to deal with landlording issues. I found a deal I am interested in, but would like some advice.

It is a triplex conversion with one 2 bedroom unit and two 1 bedrooms. The current rents are reported as Unit 1 $ Rent: $695 Unit 2 $ Rent: $550 Unit 3 $ Rent: $440.  This puts the home very near the 2% especially after negotiation. 

My concerns:

1. It will rent primarily to college students. That is particular hard on the property, and the possibility for noise if I occupy a unit is not appealing.  Upside here is it is in a rentable location near the college
2. The owner pays for ALL utilities.  This worries me and prompted me to run expenses at 60% of income instead of the standard 50%. This also hurts resale but could also be a place for me to add value splitting utilities. 
3. I have heard horror stories about multifamily conversion properties. Is there extra risk involved in assuming work was done correctly?
4. Everything has been redone "Inside and out" I am concerned that this could cover up issues with the property and make the seller inflexible with price.

I have asked for pro forma number and tenant profile to see what they are claiming and who I could be inheriting. If those still look good I will do a walk through and see about writing an offer, depending on the community's advice.

Thank you in advance for any input.