All Forum Posts by: Jesse Wolf

@Jaysen Medhurst

Thank you for the reply! I really appreciate the insight. 

After my initial into the investment I would still have a very conservative cushion for expenses, vacancies, etc.

I did not consider snow removal. Good call!

To my understanding, anything less than 20% down on a multi unit via conventional is not possible, even if you are owner occupied. I believe this to be a Fannie Mae rule.

if anyone would like to inform me that I'm wrong, I'd be over the moon!

Thanks again guys!

@Antre Lindsey

I would be managing the unit myself while I live there. I feel like this would be an easy way to introduce myself to land lording and get some hands on experience. Once I move out I would be cash flowing approx $1,200/month after property management, and this is if rents stagnate (before vacancy, expenses, cap ex). I realize this is not near the 1% rule, but the entire idea is to elimate the 30k/year I'm looking at paying on the SFH in which we currently reside. I would rent out the current home we are in and in addition I do have one SFH which I currently pay a property management company to fully take care of for me a few hours away, so I have an idea of what that will entail.

50k is me ballparking what my down payment @ 3.5% (28,525) plus closing costs on the loan. This is a conservative estimate - after speaking with a few lenders it looks like my closing costs would be as low as $11,000 so my all in initial investment may be closer to 40k

I don't believe I was including my down payment in the return....just adding 3% to 815k (815x.03) = $24,450

I appreciate everyone's comments and insights. I feel like this is a pretty straight forward equation (as long as my due diligence is done correctly) but I really appreciate the outside views and input as it helps me solidify my positon and gives me peace of mind knowing there isn't an angle I'm missing.

Hi BP,

  I've been learning more and more and I feel like I'm ready to take on my first house hack of a 4 plex.

I've done some napkin math  and can't really see how I'd go wrong, even with an economic crash and having a seriously poor first experience.

For reference and the scope of this deal: I have great credit, a high paying job, and a current mortgage of 2300/mo where myself and my girlfriend reside. I live in WA state on the western side near Seattle. Our market does not cash flow unless you are seriously in the know and doing some creative rehabbing/developing/zoning shenanigans. (or maybe have some great sources for finding undervalued deals) My girlfriend and I have spoken extensively about doing this, and we are both on the same page.

For this example I will use a property that is currently available and listed for $815,000.

We would be doing an FHA loan. My payment on the 4 plex would be approximately $4,500 after taxes, insurance, interest,principal.

The property is currently owner occupied, and the other 3 rents are 1250, 1250, and 1500. A quick tap on Rentomer and Zillow shows me they would max out at around 1600, and I could probably easily bump them to 1500 no worries. Tenants pay utilities.

I'm estimating loosely that between the 3.5% down payment and closing costs I'd be somewhere into it for 50k to get into the property. This is not a problem.

So here is where I am:

Saving $2300/mox12 by eliminating my mortgage: $27,600

Appreciation of 3% on 815k (this is extremely conservative for Seattle): $24,450

Loan paydown/Tax writoffs: In the neighborhood of 15k

Total: $67,050 for my first year, totaling a 130% IRR on my investment.

Even in the event where I only were to collect half of what I think I will for the rents, I would still be up about $40k IRR and at an 80% return. Lets say I have to spend 20k to redo roof and heating on top of that in an absolute worst case scenario and I'm only up 20k IRR my first year. Still at 40%.

I realize I still need to do all of my due diligence once I'm under contract, but I feel like from my position now to where we could be it is just a no brainer. 

After the year is up we would either move back into a SFH, or jump to the next 4 plex.

Any thoughts, comments, concerns would be highly appreciated.

I am faced with two options atm. I can either househack and owner occupy a 3-4 plex w/ FHA 3.5% down, or I can get a brand new construction home with a 10% discount. With the SFH I'd put 5% down. My credit is good, my MI on the SFH would be extremely minimal (less than $30/month)

I am pre approved for either scenario and currently living with a friend. I just rented out my previous SFH and moved to the Northern Seattle area.

Cliff notes:

-I'm in the Seattle market

-My discount would get me approx 40-45k in instant equity with the SFH

-Any 3/4plex I'd buy looks like it would not cash flow, at least not initially. I'd be paying somewhere around 1k a month to the mortgage from my own funds, however thats on a 750k-1mil property.

What are your thoughts, and which would serve me better long term?

Thanks BP!

Woo, first BP post!

I'm looking for recommendations on a CPA. From what I've heard it really doesn't matter what state they're in as the tax codes are semi-universal(?) I'm looking for a CPA that:

-Knows shelters for high income w-2 earners (well into 6 figures, sales, w-2)

-Specializes in RE investing (Just 1 rental for now...I know! I'm working on it!)

-Can help me tax plan my future RE investing (Goal to begin BRRRRing within 6 months)

-Brownie points if they're from WA state?

Thanks guys!