All Forum Posts by: Sam Morgan

Hi @John Bradley and thanks for your input. Yes, I want to carry another FHA or conventional loan for another house hack in July after the current is seasoned. Credit scores took a beating from my last purchase and solar panel installation on the roof, but still about 770.

I've read that only one FHA loan per borrower can be used at a time - do you know otherwise? I would like to be prepared if I need to go the conventional route.

@Will Fraser Thank you and that is great advice! You make some excellent points abut baking the PMI into the paper expenses. The beauty of house hacking is the extent to which one can borrow with little out of pocket. I think I mostly appreciate your point about letting the property gain equity organically over time to refinance without additional cash injection on my end.

@Paul Bermingham this neighborhood has consistently appreciated at 5%/annum. Its tough not to take advantage of 2.4% interest on a refi, but my cash goes further by using it for another purchase. My goal is more cash flowing doors. Thanks for your input!

@Jon Kelly Yes, the CoC is cut down significantly, but still in the high teens, which is why I brought the question to BP. A mentor has been persistent that $76k in PMI over the life of the loan is too much and I should refinance. I think its a reasonable price to pay in order to keep the cash I have now and maintain positive cash flow, especially if I can refinance to cut MIP once more equity is gained organically over time..

Thanks for your comments gentlemen. I feel more resolved.

Hi All!

I purchased a duplex for $340k w/ 5% down on a 30 yr-FHA @ 2.75% w/ $21k all in. I currently cash flow $265/mo (10.6% coc). PMI is $213/mo.

This is a house hack, so next yr cash flow $640/mo for a 25% return. The PMI is forever. Thats $76k over 30 years! I plan on holding long-term.

Should I refinance and put another $57k down for 80% LTV to terminate PMI or even $27.5k for 90% LTV to end PMI in 11 years?

Strong numbers even w/ PMI make me want to save my cash for the next property. Thanks for any and all comments!

Hi @Hannah Williams

I enjoyed reading your post. I grew up in Asheville, and finally got a house hack in Kenilworth over the summer. The numbers are strong and I am very pleased. Its been incredibly difficult to find rentals that make sense. So much competition in Asheville. Was wondering if you could recommend any wholesalers to me?

I work overseas for months at a time, so it's important that I can return home ready to get under contract quickly so that I can close before leaving again. Without an inside scoop, this short window has been tough to contend with. I am really hoping to find a solution.

Thanks and congratulations,

Sam

Would appreciate any good books that cover the basics of how to finance and construct a new dwelling on a lot I already own.

Thanks!

@Bryan Noth I've been making most of the repairs these last two weeks, so I think 10% between Capex and Maintenance should be fine for the next few years. Utilities are build to the tenants. Power is split metered. I have a spreadsheet splitting the single water meter, and I'm prepared to litigate between angry tenants, but I don't see that happening either. I've been very upfront and transparent about the split.

@Will Fraser Thanks for this feedback. Actually, these are all real and current numbers. I just moved in myself a couple weeks ago and got all the leases signed Aug 01. I'm told by my insurer that once I move out (hopefully to do this all again next year), my premium will go up to $150... So, not too bad.

Just wondering what people think about these numbers. Is this too good to be true? Am I missing something?

• Rents: $2,750
• Less Vacancy: $137
• Effective Rent: $2,612
• Taxes: $157.00
  Insurance: $85.00
  PMI: $213.00
  Maintenance: $137.50
  Cap X: $137.50
  Trash: $0.00
  Water & Sewer: $0.00
  Permits: $0.00
  Management $275.00
• NOI: $1,607
• Mortgage: $1,341
• Cash Flow: $265 (10.6%)

Year 2 Cash Flow: $622 (24.8%)

All very helpful, guys. Thanks. By the way I'm in North Carolina.

Basic bank account structuring:

Can Checking and Savings Accounts for individual properties be within the same institution from which I do my personal banking?

If so, can the Savings Account for one property designated to hold the Security Deposit accrue interest? 

Thanks!