All Forum Posts by: Kim Hud

@Timothy Lewis thank you!

@Jose Cisneros two places:

1) Zillow: I have 3 saved searches so that anytime a multi family in any of the 3 areas I’m looking at is listed I get alerted so I can jump on the deal quickly

2) My Realtor: she has me linked to her MLS so that way it automatically sends me emails of new listings that are put on there first

Good luck!

@Jane Cerdenola it does still cash flow but it doesn’t get the $200 per unit that I’m looking for.

@Jane Cerdenola the property is in South Norfolk about a 10 min drive from Greenbrier Mall.

Part of what I factored in is new appliances including w&d in each unit and there is a nice yard that I’d like to make an amenity by adding a small coal fire pit and grilling station.

Do you think there are amenities that would add value to get it to higher rents?

@Russell Beach I’ve asked 2 property managers and I averaged their numbers. I also looked at Zillow and Craigslist. Just checked rentometer and the rent for the 3/2 came in the same as the numbers I had BUT the 2/1s came in lower. So I’ll run my numbers with those as a worst case scenario. Thanks for the feedback!

In less than 30 days, when I close on this deal, this will be my first real estate purchase. My plan is to househack this fourplex.

I’ve run the numbers using the BiggerPockets calculator and my own spreadsheet. Everything points to this being a good deal. However, since this is my first deal, I’m nervous and question myself 5x a day lol. Constantly checking with my realtor, lender and property managers for their feedback on if this is a good deal. The only thing I haven’t done is post on the BiggerPockets forum. Something I've been really nervous about doing for fear of looking stupid or being criticized.

So here it is. Below you will find my full deal. 

Is there something I am missing? I’d really like constructive/productive input.

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Year Built: 1794

Location: Chesapeake, VA

Downtown Norfolk: 10 mins

Virginia Beach Oceanfront: 30 Mins

Airbnb Potential: Likely no due to zoning

Existing Tenants: Yes, fully occupied

Real Estate Investing Strategy: Househack

Unit 1: 3/2 | 1200sqft | currently renting at $550

Unit 2: 1/1 | 800sqft | currently renting at $550

Unit 3: 1/1 | 700sqft | currently renting at $550

Unit 4: 1/1 | 680sqft | currently renting at $450

Asking Price: $242,500.00

Negotiated Price: $230,375.00

Seller Credits: 3.7% toward closing

Insurance: $1,711

Taxes: $1,768

Approved Loan: FHA203k @ 3.375%

Rehab Estimate: $190,000 with 10% Contingency (based on the contractor I am working with)

Total Loan: $436,500.00 (or $421,950.00 if I don't dip into renovation contingency)

Closing Date 12/21/20

Inspection: Passed

Appraisal: Scheduling (if the home comes in lower than we anticipated then going to renegotiate offer price or walk away)

Contractor: FHA approved Contractor Hired

Deal Analysis: BP Calculator Link

Renovation Plan

- Roof replaced in 2019 so all good there

- Crawlspace great condition

- Electrical updated to 100amp circuit breakers

- HVAC on Units 2 thru 4 needs to be replaced

- Replacing flooring with LVP

- Repainting the Interior

- Convert Units 2 thru 4 into 2 Bedroom

- Redoing Bathrooms and Kitchens since in bad shape

- Rehabbing yard and parking area

- Some other repairs to make the home competitive

Talked with 2 Property Managers and ran some comps

Desired Rents: $5,000/month.

Current tenants on a month to month lease with 30 day notice required. I'm going to let the existing tenants know they are welcome to reapply when the renovations are complete.Since I’m doing an FHA203k loan, and fully gutting the property, I will be giving all the tenants notice one by one within a 6 month time frame (since 203k renovations have to be completed within 6 months). 

This will allow me to renovate while still getting some rental income and then charge higher rents when the renovation is over.

Unit 1: 3/2 $1,650

Unit 2: 2/1 $1,150

Unit 3: 2/1 $1,150

Unit 4: 2/1 $1,000

Thanks for all of your help!

@Blaine Alger my personal goals on my first property are actual cash flow. The percentage is not the most important right now but will be in the future

@Marcus Auerbach thanks for the different perspective

First time investor. My goal is cash flow.

In Brandon Turners real estate book he said we should aim for deals that are 80% of asking and making a minimum of $200 per unit in cash flow after all expenses.

In the inspection phase of a deal on a fourplex and the estimated renovations are getting closer to $200k (will do another post on that). The increase renovations cost could potentially take my cash flow down to $150.

If I’m no longer making $200 per unit is that a bad deal?

@Patti Robertson yeah that’s one of the biggest things. I think I could have been a little more flexible on move out date but based on the loan I’m getting this is the most prudent option.