All Forum Posts by: Kyle McShea

Just signed on my first offer and I got a couple questions / thoughts

House Hacking ... Legality?
I understand when you sign an FHA loan you must state something on the lines that the house will not be registered under an LLC. Well then how am I going to rent the rooms out of the property while I live there? No shot I am going to trust my tenants to not sue me that's crazy. I am talking to a lawyer to outline our plan tomorrow so we execute legally, but there doesn't seem to be any information available explaining how people are pulling this off. So any insight on this would be greatly appreciated.

How are properties assessed for property tax?
Let's say I buy a property at $500,000. It was previously assessed @ $250,000 with a $1,500 yearly property tax payment. How would my purchase for the property affect that property tax? I see online its 0.45% of the assessed value, so how do we get assessed value? In a Ben Mallah YouTube video I heard him say 80% of buy price is the assessed value, so would that mean ...

$500,000 * 0.80                       = $400,000 Assessed Value
And then $400,000 * 0.0045 = $1,800      Property Tax

So $1.8k yearly property taxes is correct?

Requesting Buyer to assist on Closing Costs
We requested the seller to offer cash towards our closing costs. Is the reason why this is lucrative to the seller because it's money that is able to be written off as a loss? Why do people like to go that route does it cut down on capital gains? It makes sense from surface level but I feel like there's some deeper insights I can learn from understanding the value proposition.

REI is ****ing sick
I have learned so much in the past 24 hours after signing an offer I hope I crack a smile on one reader reflecting the beginning of their journey.

Appreciate all and any insight

Hey @Patrick Roberts!

Thank you so much for the deep insights.

I just completed my third trip checking out properties in Charleston and your comment definitely helped me out with house hunting.

First of all, your comments in tandem to conversation within my network made me re-think of what exactly is my goal with real estate in Charleston?

I ended up with the goal of living in the area paying less than what I would pay for rent ($1700) while building equity on a property. My brother and I will be renovating the property we live in so that after living there for a year we have the freedom to sell the property, refinance and use that equity for a down payment in a different market we're interested in, or rent it out if its able to cash flow. Charleston RE market definitely not an easy market to start with compared to other markets I've been analyzing deals on. But Charleston is such a great place I am so much happier when I spend time there so lets do a house hack!

As for house hacking here's my strategy to find out what the property I live in COULD rent for ...
I will be posting it for rent at the highest price and work my way down after 3-4 days of it being posted. I will start high and decrease in price until I find a tenant I would like to live with. A property I am putting an offer on tomorrow has an upstairs section I conservatively think I can get $1500 for (master bedroom + small bedroom OR bonus room for office), then two bedrooms downstairs for $1,000 each. Therefore, $3,500 a month. I am currently thinking about sleeping in the detached garage & converting it to a live-able space or sleeping in an office space converted to a bedroom on the first floor. Not sure yet but this property is cool and who knows I think I could cash flow on it because monthly costs are looking like 3200.

Appreciate your lengthy response! I'll be sure to say hi to you on August 1st !!

Hey BP community,

I am brand new to REI and wanted to take the time to ask some questions to learn more about the market.

First and foremost I have been looking at properties in West Ashley & Johns Island to house hack.
- Looking for rental friendly area
- Want to be close to the beach / downtown Charleston
- I am more interested in Johns Island due to tax dollars being put into that area

#1 What does a good Charleston deal look like?

I have surfed the web and reviewed reddit posts, YouTube videos, talked with family members, and more and I've come down to this definition.

- 20% equity after rehabbing
- 4% Cash on Cash return
- 5% Appreciation rate

What are your thoughts on this base definition and how does it apply to Charleston? I understand the appreciation in Charleston over the last year was 9.8% so does that change the other pieces?

I've also noticed West Ashley / Johns Island struggles to reach the 1% rule.
Are others seeing this as well or should I find an agent who is in the loop w/ off-market opportunities?
Or would I find better opportunities to reach the 1% rule in areas like Summerville / North Charleston / etc?

#2 House Hacking Room Rental Rates (West Ashley / Johns Island)
I am looking to house hack and I would like to know what does the going rate for a 1 bedroom 1 bathroom usually go for?
I've seen a range of $1,000 - $1,300 based off Facebook Marketplace + Furnished Finder, but what are the numbers you are seeing?

#3 North Charleston areas to invest
I understand that Park Circle has been gentrified over the past couple years but it looks like it has gone through its up and coming phase. Does anybody have ideas to where other areas in North Charleston are gaining traction?

I appreciate any information / advice, thank you in advance!