All Forum Posts by: Levi Cartwright

@Levi Cartwright

got it - glad to hear you've thought about it.  i understand a true duplex might be a lot more expensive, but i think it's at least worth continuing to research and keeping an eye on.

and sticking to my original point, OOS can be tough.  i would not buy a random property in Alabama that you find on Zillow and turn it over to people you've never met just because the price point is appealing.

here are some threads on how that can go:

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

https://www.biggerpockets.com/forums/12/topics/1215726-break...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

i own property in 3 states - happy to answer any questions you have.

@Levi Cartwright

hello.  out of state is more difficult than advertised. 

do you already own a primary residence?  can you start with a house hack?

 Does the $150k purchase price to hit your preferred mortgage expense consider the income that would come in from the rooms/units that you're renting? 

Let's say you buy a duplex with a $150k loan with 3.5% down (FHA) at 7.5% interest is a mortgage expense of little over $1,000 per month. Let's say your total monthly expenses are $1,750 (including taxes, insurance, PMI, vacancy, capex, maintenance, utilities, etc. etc.) If your total expenses are $1,750 and you can rent the other unit for $1,200, then there is only $550 coming out of your pocket each month.

That $550 is what you actually pay. You don't pay the entirety of the mortgage unless your unit is vacant for months on end.

If that $550 monthly payment is less than you would pay renting yourself, it's 100% worth it. 

Let me know your thoughts and if this helps your thought process. 

@Levi Cartwright!

As others have said $20k saved and an $86k per year salary at your job at just 18 years old is extremely impressive already. Congratulations!

Let me ask you one question that I had as I read your post: why only $150k purchase price limit?  Have you spoken with a loan officer/mortgage broker?  Is that the max they told you you can qualify for?

Another question is are you looking only at singe family homes (e.g. planning to follow the rent-by-room strategy)?  

This is just my personal opinion from my own experience, I would much rather buy a duplex, triplex, or fourplex over a single family house as a house hack. However, it is of course location (e.g. maybe there aren't any multi-family properties available in your market?) and price (e.g. maybe 2-4 units are much more expensive and out of your budget?) dependent.  

In my market, in and around Albany, New York, one can buy a decent two-family house for $200,000 or less "on market." Assuming at least 2 bed, 1 bath per unit, they would probably rent for $1,100 - $1,200/unit/mo when updated. Updated 3 bed, 1 bath units can rent for $1,500+/mo.  

Doing a quick Zillow search for multifamily properties in Tacoma, Washington, it seems that there is not much inventory and what is on market is listing for $200,000/unit. That definitely seems pricey by comparison. Zillow doesn't appear to provide rent amounts, so I'm curious what these units are renting for.  Any idea?  If you're not getting over $2k-$2.5k/unit/mo over there at these prices, I would say maybe you should consider looking in nearby areas for your first house hack where the price-to-rent ratios are better.  What are your thoughts?

Vitaliy

 Move into a room in someone's house for cheap. Find some fellow blue collar types who are renting a room where you will fit in.

Get yourself a dependable vehicle that is not too expensive and does not have a lot of miles on it. Making payments on that will get you some credit history. Don't be late with any payments. Keep the insurance current on it at all times. Don't drink and drive.

Go to a local bank and open up a savings account. Fdic Insured. Put the money you intend to save in there.

If your work offers insurance and you have to pay for it, from your picture it looks like your job may have some danger associated with it. It just might be a good idea to have Medical insurance.

Have a personal budget that includes your meals and some new boots and some new clothes, haircuts,  and things like that every once in a while. 

Save as much money as you can because as time goes on things cost more. Something that costs $100 today in three or four years might cost $120.

Budget for the needed maintenance on your vehicle, oil changes filters and some repair expenses which are going to happen over time new tires things like that. Take care of your vehicle and it will take care of you.

Good Luck!

Congrats on saving so much so early and thinking about your future already! 

For 150K I'm not sure what you'll be able to find, but my guess is not much.  Consider if you would be willing to have roommates and how many . . . this might enable you to pursue something more expensive while saving for your next one.