All Forum Posts by: Nathan Hui

Mike thanks for the input, almost every time you post I learn something valuable. I really appreciate your time. Purchase cap rate is a new concept to me. What exactly is purchase cap rate? 

My appreciation estimations are (honestly) almost completely arbitrary. How do you make reasonable estimations on appreciation so your actual return estimations are accurate. If the value of this property doesn't appreciate my annualized return will be massively different, I agree. 

It seems like the majority of people are on the transparency train. I have been told in the case of house-hacking that you MUST have a “bad cop”. Can anyone with former house-hacking experience share about this topic?

@Mark Gonzalez I think the priority is to fill the vacant unit. Unless your unit is completely uninhabitable I would save the cash to pay off debt and worry about your unit last. With two units of paying tenants that should significantly reduce your living expenses. I’m sure your utilities are kinda insane but you should still be paying less to live than if you were a renter or a SF home owner. Focus on trimming the fat in your personal finances, if you can. I know you said you were in a unique situation financially so I’m sure that has to be playing a part in this.

I know this must be challenging for you since the 30k in credit card debt is an absolute cash flow killer. I hope you are able to consolidate your debt, pay it off or maybe even refi in the future.

Thanks for the input, this situation is definitely strange. Seems like there is potential for this to go well or horribly wrong with the right circumstances. 

Hey BP folks, 

I am under contract for a small multifamily I am planning on house hacking. While under contract we discovered one of the tenants has actual died recently and the family has been paying the rent while they decide what to do with the tenants belongings. This would be my first investment property. I have a complete lack of experience with this type of situation. 

The unit itself is trashed (expected). I intend to renovate the unit after the unit is vacated. 

What should I do in order to protect myself while going through this process? I don't even know what questions to ask and what things I need to do to insure I don't immediately get involved with a legal dilemma after closing. 

Nathan 

I am under contract for a similar deal. What did you end up doing?  

Im asking how to determine ARV on a quad. Your answer before was "ARV on a quad will be similar to SFR". In other words, the value of a quad will be based on comps in that market. If it is as simple as that then I already have my answer.

I ask this question because I have an opportunity to significantly raise the rent roll in a quad I am looking at but I do not want to put more cash into a property than it is worth. I really do not care why lenders differentiate between (1-4) and (5+). 

It seems logical that the value of a small multifamily property is proportional to its ability to produce rental income. I am new to this so I am trying to confirm whether or not this is the reality. If lender's rules are the key to this, then yes, please share. 

So the way the property is acquired makes the difference? I understand that commercial rentals exist for the sole purpose of investment but quads are not like single family, to me. For example, the quad I am interested in is 4800sq ft, 8BR, 6BA. If that was compared to other SF it would be worth at least 500k in my area but its not. I am under contract for 200k. And I think that is a competitive price since the gross rental income is $2100. No investor would pay 300k for a quad that produces $2100, also nobody who has the money to buy a 300k home is going to buy a quad for their primary residence, unless they are house hacking but still.. that's a bad deal. 

I really do not see the logic on how the means of acquisition make the valuation different. My argument is quads should be valued the same way any other exclusive investment property is. Can you explain why not? 

Why wouldn't an investor look at a 5 unit the same as a 4 unit?