All Forum Posts by: Sean Haley

 What are your returns selling cash (net returns) and putting the money in th markets at 8% year vs. what rate you are charging over the next 20 years. Remember also that the interest on the loan is taxed at ordinary income rates.

So for example lets say you have 100k and were making 8% in the markets - 8k per year and say you are in top bracket, you will pay $1600 in taxes per year or netting 6400.

Now lets say you did a loan and were at 5% you are earning $5k per year (actually less because principal is being paid down and some of money goes into essentially a 0% checking account). But for ease say 5k at 37% taxes you are netting $3,150/yr.

Thats over $3k per year... Just food for thought

@Sean Haley - There are volumes of books and other information out there about seller financing.  I've purchased and sold many properties this way and feel it's a wonderful tool, but with risks.

In the most simple form, you sell the house to your tenant and get a note in return.  The risk is that you may have to foreclose on the property if they fail to make the payments.  That's probably the most important question you need to ask yourself - are you willing and prepared for that outcome?  In this case, since they are already in the property, you probably have a fair understanding of how they keep the house and what their payment history is.  However, even in the best of circumstances things like death, divorce, and disability can quickly change that.  I would also recommend that they have sufficient 'skin in the game' IE additional down payment above and beyond just having lived there a while.  It's far less likely you'll foreclose on someone who puts 20-25% down than 0-5%.

Seek out someone with experience to help you, a real estate agent, title agent, and/or attorney are great places to start.  Just beware, most of these 'experts' are not experts on seller financing.  

Also, you may want to consider using a note servicer (in my area many title companies offer this service).  They will be the intermediary to collect the funds, get you paid, and send the notices (and handle the foreclosure) if needed.

@Sean Haley

does it have a mortgage on it?

why do you want to sell?

@Chris Seveney

My name is Tyler Benotti and I am a license Real Estate Salesperson in MA. I service multiple areas throughout MA, but Cape Cod is one of my primary areas. I currently am working with a client who is looking to flip a property between Bourne to Barnstable. Currently, my client has a max budget of $600k. We have identified several properties in the past few months, but he would be pretty tight on the repair/renovation costs. He is looking for an investment partner to help with these costs and would split the proceeds respectively. If anyone is interested or knows of anyone that would be interested, and would like more details, please reply to this message. Thank you!

Hey BP, 

I recently shared some of my woes in finding a house hack deal that works numbers-wise so I wanted to share the details. Trying to consider the long term wealth benefits of owning real estate and not just the numbers themselves. My goal is to pay less than I would renting and get my feet wet with REI and landlording without bleeding too much every month. Please scrutinize the crap out of my numbers!

I'm going to paste a photo of my analysis so I don't have to type everything out but wanted to call out a few things: 

-This is a duplex house hack where my fiance and I would be taking over one of the units. 

-Taking 10% reserve for vacancy, PM, and Capex

-5% for repairs 

-All other numbers are standard values based on my area. Need to do some more digging into utilities though. 

-Current market rent is $1,250 per unit

Here is what numbers look like when I live there: 

We currently pay $1,450/month in rent right now so that's something to consider. We'd be paying less than we would renting after taking conservative reserves. 

Here is what numbers look like when I move out: 

Negative cash flow but

1. Rate is 7% 

2. Only put 5% down 

3. Cash on Cash return is 52.7% (obviously we will put more cash into things throughout the year which will make the COCR lower.

Would love to hear people's thoughts! Thanks for your time :) 

-Ben, aspiring multifamily house hacker 

What are the essential metrics and formulas you use to analyze potential deals? 

From cap rates and cash-on-cash returns to net operating income (NOI) and internal rate of return (IRR), how do these numbers help you understand their impact on investment decisions?