All Forum Posts by: Mathew Deines

Like Tommy said, it's public record.

Along the same lines of hard money and needing skin in the game? Does it necessarily matter where that 20% comes from? 

For example: 20% from a friend or relative? 

If this is a viable route, could I get enough hard money to fund the rehab?

Sorry for hijacking your post.

@Daniel Diaz

1) No, I do not think $1,500 is enough monthly cash flow period. I am not sure if it mentioned in this post but our main reason for this buy was house hacking. We wanted to be able to live off of one income in case something happened to one of our jobs or health.

2) We have a reserve fund close to 6 months of the mortgage. All the renovations that we did was from funds other than our reserves.

3) The property is located in Serra Mesa, just south of Montgomery Field. Cross streets are Hurlbut and Sandrock.

4) I don't think this property is located close enough to the beach or other attractions that could justify the Air BnB. Plus, that sounds like a headache to me.

Let me know if you have any other questions.

Welcome @Krystle Padilla! I grew up and lived around Escondido most of my life. Good luck on your transition to civilian life. I did it once and it wasn't easy for me, mainly because I didn't have a great plan. You can learn so much from this site and the podcasts!

*6 month UPDATE*

After owning, renovating and occupying this 4-plex for 6 months now, I certainly feel as though our plan is working. 

We spent on average $6,000 per unit to renovate 3 out of the 4 units. The 4th unit is still occupied by the AMAZING tenant that we inherited. And we were able to raise their rent as of January 1 from $1700 to $1775 and added a portion of the water bill to their rent.

All tenants are paying a portion of the water bill using R.U.B.S. We take 25% off the top of the bill to cover the laundry room and minimal landscaping and then breakout the remaining 75% over all the tenants in the building (ourselves included). The water bill has dropped from $1100 every two months to $550'ish.

The current numbers are:

Unit 1: Owners Unit

Unit 2: $1900/mo

Unit 3: $1775/mo

Unit 4: $1925/mo

Laundry room income = $200 (approx/mo)

Income = $5800

Mortgage = $6272 (including taxes)

Owners portion = ($472), this is as pretty close to living for free in San Diego as I think anyone could hope for.

There is a approximately $100 more that we have to cover in the gas & electric bill for the water heater and exterior lighting. 

Once we move out of our unit in July the numbers should look like this:

Unit 1: $1925/mo

Unit 2: $1900/mo

Unit 3: $1775/mo

Unit 4: $1925/mo

Laundry room income = $200 (approx/mo)

Income = $7725

Mortgage = $6272 (including taxes and insurance)

Cash flow = $1500 (excluding any maintenance expenses which have been minimized by renovations, I think)

It hasn't been all great. We had a slab leak that set us back almost $1500 in repairs. Thankfully we had extra flooring that we were able to put down in place of the water logged carpet in the freshly finished nursery in our unit. The leak showed itself in the tenants room on the other side of a common wall with our unit. I gave them a $75 credit for the hassle.

Thanks for reading! Please let me know if you have questions or comments!

Disregard - I finally figured out how to add the time factor into my formula.

Do any of you happen to have a spreadsheet that will calculate a particular tenants portion of the water bill considering the number of days they have occupied the unit? For example: the tenant moves in 9/24/2015 but the bill for the building goes from 8/7/2015 to 10/06/2015. 

I have a sheet that I am working with but I cannot seem to get the correct number when trying to add in the number of days the tenant occupied the unit. Any assistance would be greatly appreciated. Thanks!

@Jimmy Watson: I am not sure if I mentioned in my post the amount of reserve money that we had to have in the bank. We had to have 6 months PITI in the bank, either liquid or semi-liquid (stocks/retirement accounts) reserves. For us that was around $36,000.

Best of luck to you! There is always a way! 

Perfect! Thanks @Wayne Brooks, that is what I need to know.

I am sure the answer is somewhere on biggerpockets but can someone give me the short story on part of the process for a 203(k)? 

I have 2 friends, A is the contractor and B is the buyer. A only wants to make a small percentage for his time because B is his friend.

If the bid for renovations comes in at $15,000 but the needed repairs to get the property to a living standard only cost $10,000, does the contractor get to keep the difference? If the contractor only draws the $10,000, what happens to the other $5,000? 

Please let me know if you need more information.

Thanks