All Forum Posts by: Michael Mahung

Curious to see what people say! I use Google Sheets myself and use the Property Manager's Ledger's etc to track profits but that's not the greatest. Would be great to have a one pager to see the overall cash flow, profits, expenses, etc. 

Hey @Michael Mahung - congratulations on taking the next steps to purchase a house hack - I think this is your 2nd post. North Austin still has some great deals that you can find where you can make some minor repairs and increase rents to make it a good cash flowing deal. Do you have a worksheet with all the details of your investments? I would highly recommend tracking on excel and saving the tabs so you get a better idea of the deals in the area and how the market looks in the specific neighborhoods. 

Would be happy to share my worksheet with you! Just send me a PM. 

Hey @Michael Mahung - Nice work!  Definitely looks like you did your homework and put some effort into nailing the numbers down.  I'd definitely move forward on the deal if it is a place you are comfortable living.  What area of Chicago is it in?

@Michael Mahung there is a lot of info we would need to help, but if this is in a good area then I would go for it. Normally a 4 unit will bring in more like $4500 per month in most Chicago neighborhoods once it is stabilized (assuming some 2 bed units and a garage). This means you can eventually refinance out of that FHA loan down the line which will make this thing a very strong cash flow property.

Your vacancy is likely a bit high based on most areas of Chicago. We run 5% internally, and on a 4 unit you might even just put down 1 unit's rent for the year (as that is likely the most you see in most years). 

Management is maybe something you don't need to run if you are living in the property. I know incoming are a bunch of sophisticated investors who will tell you to always run management, but if you are putting down 3.5% and living in the property, do you really think you are going to pay a manager? The answer is probably not! 

Like others have said, my big concern is whether you will even be able to use the FHA loan. This is missed a lot here in the forums, but sellers (and listing agents) hate FHA deals since they have a higher failure rate in terms of contracts falling apart. If you can get a quality 4 unit with an FHA loan that cash flows, do it.

Compute the numbers based on the building being fully rented. Your living there is a flex cost that more than likely won't be permanent. Also, consider living in one of the smaller units (if possible). 339k for a 4 unit that can get 4000k+ rent per month is EXCELLENT, not sure how much work is needed to get those rents though.

Caveats are 

#1 It very well may sell for more than 339K, estate sales are generally priced to sell quickly but can still get bid up.

#2  If it's that cheap it may be in a rough area where it's hard to get those rents and reliable tenants, or it may just be in really bad condition. 

Hope this helps a bit!

@Michael Mahung are u running the taxes at the old valuation or projected? Heat seems way low

@Michael Mahung

Not bad cash flow, but not great either since it's only a little over $100/door. I think the quality of the deal really depends on what the total cost of rehab is for the items you gave. That will allow you to project an accurate CoC amount. Also I do think your water/trash/sewer expense is a bit low. I'd estimate more like $200-$230/mo for that ($50-$65/unit). Is the building metered or unmetered for water? The legal 2-flat I just bought is unmetered so my water bill about $217/mo which was higher than I expected.