All Forum Posts by: Kathleen McCabe

@Caleb Heimsoth interesting point. I may have self sabotaged here ... My lender and I have been building a decent relationship over the past few months and forgetting about the FHA / foundation requirements, I casually mentioned to him that the foundation was definitely off, so now he's asking about inspection issues.

Is it typical that a lender would even ask for an appraisal or is that only something they do if they anticipate an issue?

@Harjeet Bhatti thanks ! I’ve heard of this before. Are there a lot more hoops to jump through? How difficult are they to obtain?

Hi @Kenneth McKeown, Thank you so much for your reply and its so nice to hear the perspective of an investor in the Dallas area. 100% what peaks my interest most in this deal is that is in such a great location. I am in my late 20s, and I still want to be in a central area that is walking distance to bars and restaurants. Right now I rent in a pricey apt in uptown, and I just cant imagine throwing money away like this for another year. This is the first duplex I have seen in an area I would LOVE to live that I can afford. Any other duplexs in the 400s appear to be in areas like Arlington where I could never get enough rent to make up for the payments let alone even want to live there personally at this point in time. 

The good news is too that my estimate for a monthly payment of 3400 seems high. I got a 2nd opinion from a lender who is an investor himself and his estimate was 2900 a month. So, AS IS with rent it is cash flowing 100 dollars total. Not much, but like I mentioned there is definite room for improvement and I feel I could easily bump the rents up with minimal improvement. 

However, the new curve ball is that based on my inspection there are most likely foundation issues... so using an FHA loan may not be possible. ugh... I just made a new post asking for guidance with that and hoping the BP community knows a way to make it work.

Thanks for your help!! 

Best,

Katie

@Steve K. Thank you so much for your reply! You make a lot of great points. There current rents are definitely below market value, so I do believe there is some wiggle room there with minimal improvements to the property needed. I feel like because the neighborhood is so popular so I do not anticipate vacancy being an issue in fact one of the tenants has been in the place for seven years and wants to stay! (hence the low rent though...) According to the the neighbors, he's a really great guy and quiet. As for appreciation, Its hard to tell? The neighborhood is already built out, but its so popular that I cannot picture it going down at least. The lot values sell between 400-500K. Right now the land is zoned for SF or duplex from what I know, but it would be interesting to see if it would be possible to build another unit in the backyard... Because for FHA I only have to put 3% down, I do have financial wiggle room to make improvements. However, I would not be comfortable putting 25% down, if that makes sense. I do have a very solid job at a large tech company that allows me to float additional maintenance if needed down the road.

Thanks again!

Hey BP fam :) I have a duplex under contract in an amazing location (Lower Greenville, Dallas Tx). I've been very excited, the numbers are looking fairly good and I feel this is an amazing opportunity. There are tenants in both sides of the duplex now and everything is functioning properly. I plan to move into one side. However, the duplex was built in 1924, and I can definitely feel dips in the floor... Inspector recommended getting an engineer to check out the foundation. 

Is this the kiss of death for my deal being that I will be using an FHA loan? Are there ways around this? For example if I get a quote for the foundation and negotiate that out of the offer price? Will some lender still work with me regardless of the state of the foundation or is an appraisal mandated? I am not afraid to take on a foundation project, but I could not afford to put 25% down on this place for a conventional loan. Looking for a creative solution.

Thanks in advance!

Katie

@Chris Seveney Thank you! I really appreciate it. That makes complete sense. The last factor though is the lot value, based on comps, the lots in the area alone go for 469K. I have it under contract for 427K... Lot value is not really a factor I've heard talked about much, so I am not sure how much weight that should have in my decision.

@Chris Seveney - Thank you for your reply! I totally understand what you are saying. I could live there probably two years to save money on rent but can't see myself there long term, so I would definitely have to make improvements to increase rent so that it breaks even if I were to move out. 

Is it really a cash suck if the money is still going towards a mortgage? Also, I feel like holding onto the land is actually the most valuable part of this deal, not even the duplex itself. 

But also, at what point am I just talking myself into a deal? I feel like I have the angel and devil on my shoulder in this situation. 

Thanks!

Katie

@Avery Carl I believe there is definitely room for a few improvements. The side going for 1250 could probably go for at least 1400 without any touch ups. The bathroom is very basic / simple as well as the kitchen, so could perhaps modernize those a bit.

Hello, I live in Dallas TX and have been eager to get into the investing game. I am currently under contract for the first time on a Duplex in Lower Greenville. The location is the BEST - three blocks away from all the popular bars and restaurants. The street the duplex is on is sprinkled with mainly single family homes in the range of 650K-1.1M. Very safe neighborhood and would be easily rented. Also, the lot is HUGE for this area. Looks like lots alone in that area are going for around 400-500K. And you know what they say... LOCATION LOCATION LOCATION :)

I have the duplex under contract for 427K. Each side is 2 bed 1 bath, 1100 Sq ft.The plan is to use an FHA loan and live on one side. However, my biggest concern is the age of the home. it was built in 1925. Right now, one of the sides is renting for 1750 and the other for 1250, so bringing in a total of $3000 in rent per month.

According to my lender, with only 3% down I am looking at monthly payments of 3400 total. So my concern is, if I were to move out of the duplex after a year and rents did not change, I would be down $400 a month. However, I do believe I could get increase rents fairly easily with a few upgrades - maybe even as is.

Another thing to note is that by moving in to this duplex, I will be saving 400 dollars a month in rent as is, so seems smart for that angle. 

Is it smart to buy a duplex with an FHA loan if you feel you may just be breaking even on mortgage payments down the road? In my opinion, other people would still be paying off my mortgage over time so still seems like a good idea.

Keep in mind, I've had my eye on the Dallas market for Duplexes for awhile, and this is the only one I've seen in an area where I would actually want to live that I can afford. 

Thank you in advance!

Katie

Hi BP Community!

I'm actively saving money to get my first deal, and am considering many different strategies... Brrrr, Turnkey investing, Hard money etc. I'm an avid BP podcast listener and I've learned that the less money down you can put into a deal, the faster you can move forward on to your 2nd and third investment homes etc. 

Recently I've learn of some no-money down, new housing developments new Dallas TX. This seems a bit too good to be true...Has anyone invested in a similar community? I know zero money down will decrease cash flow... but for a completely NEW house and zero money down, minimal cash flow may be justified.

Thoughts on this strategy?

Thanks,

Katie