All Forum Posts by: Melissa Harris

@Account Closed I would love to hear how you get the valuation you are looking for from the appraisal! Here in Colorado, finding 5+ unit multi-families that are similar are very hard to find for comps. Do you find these comps from your MLS or do you find them in LoopNet?

Hey BP family! I am really needing some advice on this and I hope that I can explain it well enough for you to be able to answer my question.

So my situation is that I am self-employed (Realtor) and the last 2 years I have written off alot to be able to not pay much in taxes, so I only showed I made $45,000/per year. This year I will be grossing around $100k and I am told if I want to buy another property, that I cannot write off much this year to show "more" income. So this means that I will more and likely pay up to $20k in taxes! Which I don't want to do at all. 

My question to you guys is, can I invest that $20k that I have saved up into a condo or SFR by the end of this year and NOT have to pay taxes? I know that there are a TON of benefits for owning real estate, I know some of my friends that are investors, don't have to pay a dime to the IRS. I am wondering if I am way off and just dreaming that this could be possible or if there is really a way to do this?

I have never attended this conference before, for the people that have, could you provide me some information of the type of content that is usually at this conference? What did you take away from this? I am new into real estate INVESTING but not new into real estate, I have been in the real estate industry for 7 years and been a Realtor for 4.5 years. This conference sounds very intriguing but would like some insight on some of your thoughts before making the leap to pay for it and go. Thanks :) 

@Steve K. the $203,000 is what I currently owe on my mortgage, I bought the home in 2015 for $210,000 and I was able to use FHA grant program, which helped me with my down payment and then the lender covered most of my closing cost and then I took my some of commission I would of made on the sale and used it to pay the remaining closing cost, which was around $2,000. So I ended up getting around $1,000 back at closing. I just got it last month and it appraised for $284,000, yeah the market in Greeley is slowly raising!

So I calculate what I bought it for in the rental property calculator? I am still getting use to it and wasn't sure how to input those numbers. I just spoke to a local property management company and they looked up my address and they are saying that I actually can only get $1,850/month with the tenants paying utilities. So I will have to re-run my numbers. 

Yes I did put in my monthly expenses. Which I put:

Water- $80 (HOA pays for exterior water & trash)

HOA- $130/month

PMI- $143/month

Vacancy- 5%

CapEx- 5%

Repairs & Maintenance- 5%

Property Management- 10%

Property Taxes- $100.42/month

Then for the future assumptions-

Annual Income Growth- 1%

Annual PV Growth- 3%

Annual Expense Growth- 1%

Sales Expense- 9%

Do you think my repair/maintenance and CapEx is high? With it being only 2 years old(just replaced my roof this month with Class 4 Impact resistant shingles), do you think I can lower those "%'s" or should I keep them at 5%?

@Linda Weygant I heard this from another class I attend on "house hacking" but maybe I heard him wrong, which could be a possibly! Glad to know that this is NOT true. Thanks for clearly this up for me :) 

I was told that I am not able to purchase another FHA property if I currently have one in place, I can only do this if I bought a house "certain miles" away from my current home, this is a question I will have to ask my lender it looks like to get the right answer.

Thank you for your advice! 

@brent coombs yes I didn't think it of that way but I guess I am asking that! If I would sale my home, I would use the $80k to pay of a tax lien I have which is $23,000 and then invest the rest into my next investment property. Which I plan on "house hacking" and buy either a duplex, 3-plex or 4-plex. I am not sure on the term of the new loan yet but I plan on using a FHA 3.5% down. My lender is working on the numbers for me.

Thank you for the advice and feedback!

@jennifer s I am not sure what the $4,000 cash needed is about. I used the "rental property calculator" and it put that in there.

Yes I did put in my monthly expenses. Which I put:

Water- $80 (HOA pays for exterior water & trash)

HOA- $130/month

PMI- $143/month

Vacancy- 5%

CapEx- 5%

Repairs & Maintenance- 5%

Property Management- 10%

Property Taxes- $100.42/month

Then for the future assumptions-

Annual Income Growth- 1%

Annual PV Growth- 3%

Annual Expense Growth- 1%

Sales Expense- 9%

I hope that someone can help me :) I am Realtor here in Colorado but I am slowly trying to turn myself into a real estate investor and start "house hacking". I am in a unique situation, as I bought a 2,700 square foot new construction home in 2015 and learning more and more about house hacking this year, I am wanting to buy a "duplex, 3-plex or 4-plex" by next year. But I know that the banks don't like me buying another primary residence and buying "down in square footage" Do you have any strategies on how I can go around this obstacle and still be able to buy the duplex, 3-plex or 4-plex with a FHA loan and live in one of the units? Also, I did buy my home with a FHA loan as well, so I know I will need to refi out of it and get into a conventional loan.

On a side note, I have ran my numbers on my personal home to see if it will be a great rental property for me. Could anyone tell me if this looks like a good rental property for me? I am trying to see if I should keep it as a rental or if I should sell it. Here are the numbers:

Purchase Price: $203,000.00 

Purchase Closing Costs: $1,000.00 

Estimated Repair Costs: $3,000.00 

Total Cost of Project: $207,000.00 

After Repair Value $284,000.00

Property Description Maintenance free home in Greeley. Bright ranch plan. Beautiful kitchen w/island, granite counter, stainless appliance package, island & dining space. Large master suite w/ walk-in closet, 3/4 bath with spacious walk-in shower. Highly energy efficient home. A/C. Tankless H20 heater. Fully landscaped yard maintained by the HOA.

Down Payment: $0.00 

Loan Amount: $203,000.00 

Amortized Over: 30 years Loan 

Interest Rate: 3.625% 

Monthly P&I: $925.78

Monthly Income: $2,200.00

Monthly Expenses: $1,949.20

Monthly Cash Flow: $250.80 

Pro Forma Cap Rate: 4.97%

NOI Total $14,119.00

Cash Needed $4,000 

Cash on Cash ROI 75.24%

Purchase Cap Rate 6.96%

Welcome Matt! 

I am actually planning on doing the same thing with my personal home, as far as making it a rental and then buying a 3 plex or bigger and live in one of the units. My struggle I have had is that I am self-employed (realtor) and unfortunately I wrote off to much on my last 2 year of taxes and so my DTI doesn't look so good now. So it will be a longer process for me to do it but I'm happy to see that you were able to do it! Hope to see you around on the Denver meet ups.

Also if your looking for a Realtor to help you find your next buy and hold, I would love to help! 

So here are the numbers if I would keep my house as a rental and not sale it. Bought it in 2015 for $210,000. Since I bought it before the builder broke ground, I did in a sense by it just under market value. If I would have bought this home when it was fully completed, I would have had to pay somewhere around $225,000 for it. I now owe just under $205,000. Mortgage Payment- $1,300 PMI- $143 Water- $50 HOA- $130/month I can rent my home out for $1,900-$2,000 a month. I know I need to figure in vacancy & maintenance fee (property management) even though I do plan on doing property management. What type of percentage do I figure for these two?