All Forum Posts by: Kevin Nieves

In my current property I pay $840 mortgage. I wanted to purchase a Multifamily for 425k and house hack. I was thinking, if I get the Multifamily in that price range I will be paying a mortgage of at least 1500+ for one side of the units which would have me way over what I pay in my current property. I know that I won’t be staying in that multifamily forever, because I will be building my portfolio, but that’s double what I pay now. I don’t mind paying close to what I pay currently on my mortgage. But going from 840 to 1500+ doesn’t seem like a smart move. How can I analyze a multifamily and make sure I’m cash flowing with me living in one of the units? Or how can I ensure that the property will cash flow once I move out? Should I invest in a single family to start with? Please help.

Put it all into context. How much are you putting down & what's your state property tax?

A 425k with 10% down is about a $2400 payment before insurance and taxes. You're saying one side rents for $1500? I think being cash flow negative in house hack is okay, just not to that degree. If you're in the hole $1500 monthly, that'd be like you paying double your current rent before any issues or other expenses.

You need to find a cheaper duplex, or put more down. Or find a better cost level. If you're only paying $840 for a mortgage and want a duplex, you need to be looking in the $250k-$275k range.

I will continue to look for cheaper multifamilys and atleast do the numbers as if I wouldn’t be living there. is that the best way to analyze a house hack deal?

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Quote from @Jewel B.:

You should look for properties that will cash flow well without you living there. If you don't cash flow while living there, does it really matter if you're living rent free or very cheaply? Then when you move out you'll have a lot more cash flow, all the while building equity and paying down principal.

Now, if you're saying it's a duplex for that price, I find it hard to believe each side will rent for enough to cash flow. If the mortgage is 3K a month, plus expenses, that would be a pretty hefty rental price required.

Thanks for the feed back.

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Quote from @V.G Jason:

Quote from @Kevin Nieves:

Thank you for the feed back.

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Quote from @V.G Jason:

Quote from @Kevin Nieves:

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Congratulations Marisa! I can’t wait to get started.

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Quote from @David A Lisowski:

@Kevin Nieves

Open a HELOC and take a draw when you find a deal that works. There's no need to have cash sitting in an account.

The only reason to have it in an account would be to avoid "sourcing" the deposit during a loan approval.

Otherwise, the numbers should drive the deal.

Thank you for the advice David. I was wondering if I should do a HELOC or Refinance. I see that HELOC is the best choice.

1 Vote

Philadelphia, Pennsylvania

Quote from @V.G Jason:

Anyone looking to refinance in 24 months is likely going to hit a similar rate, maybe 1% less, than they are getting today. Fed funds still has more to go, and good luck guessing how long it sits there for. It's not going from 4.5-5%(when it gets there) to 2.0% in 6 months.

Once that realization hits market sellers, and the comps in Q2-Q3 '23 show this Q4 '22 & Q1 '23 sale information, prices will adjust. That may take 3 months once they see it, or 6 months, nobody knows. But long hold at high fed funds + poor comps will do the trick.

Thanks Jason! You are right, there may be no change in the next couple of months. I wanted to be on the safe side and get advice from people that are already doing it. Thanks for the reassurance, really appreciate it!

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Philadelphia, Pennsylvania

Quote from @Malcomb Stapel:

Quote from @Kevin Nieves:

Hi everyone, my wife and I want to refinance/heloc our primary property and hold on to the funds to see if property prices/interest rates go down more. Is that a good idea? Or should we just buy now?

If the property cashflows with the current rates, why wouldn't you buy? A lot of folks are getting hung up about rates, as if investors weren't buying when rates were at 10% or 15%. The rate is only one number affecting the overall deal.

This makes sense, you are right. I will make sure to do my numbers to ensure cash flow. Thank you for your feedback!

1 Vote

Philadelphia, Pennsylvania

Quote from @Olivia Radziszewski:

Hi @Kevin Nieves- I always recommend that people buy now. Make the market work for you! For example in my market there are way more opportunities to get a lower purchase price right now. Yes, the rates are high. Everyone I talk to that is buying is looking to refinance in the next 24 months.

Also, for reference I was waiting for prices to, "Go down more" at the start of COVID and look where we are now:)

The best time to buy real estate is yesterday!

Thank you so much for the feedback. This helps a lot!

1 Vote

Philadelphia, Pennsylvania

All Forum Posts by: Kevin Nieves

Kevin Nieves has started 2 posts and replied 11 times.

Post: Multifamily or single family as first investment?

Post: Multifamily or single family as first investment?

Post: Multifamily or single family as first investment?

Post: Multifamily or single family as first investment?

Post: Multifamily or single family as first investment?

Post: BRRRR Cash Out Refinance Rental in Philly

Post: New to investing, need advice

Post: New to investing, need advice

Post: New to investing, need advice

Post: New to investing, need advice