All Forum Posts by: Lee Stephens

Hi BP,

I'm an investor from Chicago looking to potentially purchase my first property using an FHA loan. If I went this route I would rent out all of the units from day one (i understand that this is only permitted after 1 year of owner occupying) which brings me to a couple questions..

1. Has anyone been checked on to ensure they were using the FHA loan properly and occupying one of the units?

2. Do you think this is a risk worth taking?

Appreciate all the feedback everyone! I learned a ton from your responses.

Welcome Ignacio!

That's an awesome why. I wish the best to you in REI!

Hi Nikki,

Welcome to BP! 

I think it's wise for you to finish school as it will allow you to build capital quicker. It ultimately comes down to both minimizing expenses and ensuring that you and your family are comfortable. It sounds like moving out is top on your priority list. I would look into either being a renter for starters, or house hacking of some sort whether that's with a multi-family or possibly renting out a room in your SFR. If your plan is to just own you will likely incur more expenses rather than if you were to do one of the options I just mentioned, therefore slowing your process of building capital to invest into real estate.

I hope this helps and wish the best to you on your REI journey!

@Ross Denman This was really helpful, thank you.

@Lori Greene You hit the nail on the head! Thanks, I will definitely give a call to people/companies that have units listed. The investor meetings and talking to people involved there has been tough as the market is about 60-75 minutes out from me.

 Will surely make it work nonetheless :)

@Jason D. It can make or break my investment, that's the issue.

For example, if I'm finding that rents are going for 1,200 for properties similar to mine (don't know for certain if that's with or without utilities) and my budgeted numbers are cash flowing at 250/month without utilities, then if by chance I needed to include utilities to get a renter, it would kill my investment. The underlying issue comes down to knowing what rents are going for with and without utilities included and I've found that hard to determine with Rentometer, Craigslist, Zillow, etc. Do you see where I'm coming from?

@Jason D. Thank you - that's what i'm getting at here.. some are offering utilities and others are not. It's caused me to have a difficult time budgeting prior to getting into a deal. On rentometer it will only list the recent rent rates but doesn't get into detail on utilities offered. Facebook, Craigslist, and Zillow are pretty spotty. I think my next step would be to try and create a relationship with a couple PM's and see if they will provide any input

Thank you guys for the input. I was under the same impression until I saw houses in the market I'm investing in (Northwest Indiana) being advertised for having certain utilities paid for which has been making it difficult for me to determine fair market rent

Hi BP, 

How do you guys typically go about expenses on a SFH? Do you have a general rule, or advertise relative to what the market is offering? I have yet to purchase a property, but think it would be smartest to pass the utilities, trash, and snow removal/lawn down to the tenants due to there being less variance; however, I'm having a hard time estimating rents as rentometer, Facebook, Craigslist, etc. doesn't always include if a listed rental rate is or isn't including X,Y,Z with rent.

Any help is greatly appreciated.

Thanks!