All Forum Posts by: Mark Douglas

That may be the case, but you'd be able to live for free while paying down the principal. Then in a year or so, you can move out and drastically increase your cash flow on that property. Do you have enough extra money to survive a rough month or two repairs wise?

I may be able to scrape by, without having to pay $700/mo in rent/expenses, but it would be pretty tight. That said....it's just me (no wife, kids, etc) so my risk tolerance is pretty steep right now. I'm definitely willing to sacrifice and save up again for that year or so, but I'd feel more comfortable with another $5k or so stashed away...

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Originally posted by @Brent Coombs:

@Mark Douglas, are you living rent-free currently? If not, then it might take you longer than a year to find a better cost/benefit opportunity.

Are quads like this readily available at this price point? If not, then time is NOW!

Any harm in offering even lower than $165k? All the best...

PS. Oh, and you asked if this was a good idea:" I'm draining my savings to cover the down payment". I say: Congrats! Why not? How could you do it cheaper?....

Nope, I'm not living free right now. Apt. rent is $650, and when you throw in electric and renters insurance, total cost is around $700~750/month.

In my mind, those expenses would automatically translate into savings just by moving into the quad (I'd still have to pay electric..separately metered units..but that's a minimal expense)

Still, the cash reserves being wiped out makes me hesitatant to pull the trigger.... To your point, securing a lower price would lower my down payment..

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Originally posted by @Vincent Crane:

There's always repairs that you don't anticipate. Good chance of at least $5k-$10k that you're not expecting. You have the right idea with an owner occupied FHA loan to house hack and get started, but make sure you have some decent cash reserves. I'm in a similar situation, waiting another year isn't a terrible idea.

That's what I'm leaning towards..

Thanks for the response, I hope your patience is rewarded!

Mark

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(No major repairs are anticipated upfront)

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Originally posted by @Andrew Syrios:

A couple of questions:

- What are the current rents? Do you think any of them are low?

- Are there any repairs you need to do to the building? You definitely want to include that in your analysis.

I don't know what you're including for expenses, but assuming they are reasonable estimates, this doesn't necessarily look bad (of course, I have no idea what comparable sales are going for).

Remember, you're planning on living there. So what would the cash flow be if you were able to rent all four units? Basically, under this analysis, you'd be making $28/month plus living for free. That's not too bad.

$595, $595, and $575.. I did the math with thede figures, but I'd bump the last rent up to $595 as well.... Maybe $600 for all 3.

The margin seems so small though...I'm worried something will go wrong and I'll have to come out of pocket for repairs before I revuild my cash reserves..

I'm draining my savings to cover the down payment...probably not the best idea, huh?

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Hey BP!

Considering my 1st purchase... I ran it through the BP rental calc and it cash flowed $28... I'm hoping I did something wrong!

Anyway, what do you think??? Here are the numbers:

Property - FHA Owner-occ Quad

Purchase - $180k

Downpayment - $6,300 (3.5%)

Mortgaged Amt - $173,700

Mortgage - $1,250 (including taxes & insurance)

3 highest (current) rents - $1,765 (total/mo)

Cash flow - ???

I know I'm probably paying too much....I'm going to ask for a price of $165k, and see what happens..

Is this the worst deal in the world, or is there hope? I'll move on if the numbers don't work....no attachment to the property :)

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Originally posted by @JT Spangler:

Originally posted by @Mark Douglas:

Mike,

Sounds like I need to lower the bar just a bit....I can find a property with higher cash returns, but I'll be looking in a C class neighborhood... This first deal will be FHA owner occupied, so I'm having to be a little more "aware" of the location..

Trying to find a happy medium between a property in decent shape, in a decent neighborhood, and at a price that will cash flow $100/door ...or at least break even...

You're young and hungry, so here's my suggestion: set up a craigslist alert for duplexes for rent, and then start calling them every day to see if the owner would be willing to sell. It's a terrible time to be placing tenants, and you might find a tired landlord who'll work with you on a deal.

JT - I'll definitely try that, thanks for the tip! You're right, I'm hungry for this! I want to go this going! Thanks again.

Mark

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Update: Talked to the realtor, each unit has a kitchen, bed and bath ; Triplex indeed!

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Ned,

Not sure about the kitchen situation; following up with the listing agent tomorro, but there's only 1 pic from the street, and not the most thorough description.

I think you're right though, may turn out to be a SFR...

The search continues...

Thanks for the reply!

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Hello All!

I'm in the process of running the numbers on a few (2,3, and 4plex) deals. One of them is a 3 unit but it isn't a triplex, so there are no separate, walled off sections like the typical MFR. Two units downstairs, one unit upstairs. I think it's basically like a 3bd SFR.

My question is, for those that have owner-occupied, are these living quarters a little too transparent? At least with the standard multi, you've got at minimum a separate door and a truly sectioned off floorplan, right?

I don't know if I'd want to be THAT close to the tenants. Coming through the same door..walking through the same hallways, etc.

Any advice?

Thanks!

Mark Douglas

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All Forum Posts by: Mark Douglas

Mark Douglas has started 84 posts and replied 423 times.

Post: Quadplex Analysis

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Post: Duplex House Hacking - Rental Income

Post: Cash for keys to close on a owner-occupant property?

Post: Too Close for Comfort?

Post: Too Close for Comfort?