All Forum Posts by: John Doss

@Tchaka Owen

I put the management fees in there with the assumption that I won’t be managing forever (after I am no longer house hacking). And house prices vary - going west they increase or are about the same, East/south they decrease. But the reason why I really like the UNCG area is because that is where all the multi-family homes are. In my city, you’ll be lucky to find a single family home for cheaper than $220,000 that can rent for more than $1600-1700 in a good area. So the rent to price ratios appear really thin across the board (less-so with the multi-family, I believe). I put the $50k rehab in there as a very rough estimate given what it needs, but it could be more or less. I plan to do a lot of the paint and cosmetic work myself which would cut down on costs.

@Sean Rooks

@Sean Rooks

That’s a good point. And currently, my living expenses are zero because I’m living with my parents (recently out of college) but I’m looking to build equity, cash flow and start investing. So I think any house hack I do would cause me to have greater expenses than I currently have. And that’s a good point about the R&M, capex, and 5% down. I will play with the numbers today and I’ll upload the results. I intentionally kept the numbers high on property #1 because it’s so old and I am assuming there are other things that will need fixing in the near future. Also, all of the appliances are extremely dated (they could almost be collectibles), so those are some other reasons for the high capex.

Something to take into account is that both of these analyses were ran after I’ve moved out of the property. So with my occupying 1 room (or unit) it would definitely be a negative cash flow situation.

I am currently comparing 2 multifamily homes to buy as a potential house hack. Both are located near UNCG (a local university) in Greensboro, NC (less than a mile away from one another) and are great for student housing/young professionals. I ran them as rentals (once I've moved out after 1 year). I would like to get some other opinions on these before I take the plunge.

Property #1

Property #2

Some things to keep in mind:

Property 1 is a SFH that is being used as a triplex. Unit A is 2 bed/2 bath with kitchen and den (rent for $1000). Unit B is 2 bed/1 bath with kitchen (rent for $700). Unit C is the basement and its 1 bed/1 bath with kitchen (rent for $600). It was built in 1925. The roof is around 20 years old, the furnace is out so the house does not have heat. The interior is very outdated and is in need of quite a bit of cosmetic work (paint, carpet, etc.). Upon looking in the crawlspace, it appears some materials were used that could have asbestos. All utilities are currently being paid by the owner and he said they are around $400 in the summer and $500 in the winter. Obviously if I were to pay utilities, there would be negative cash flow. If I buy this property, I plan to have them split or bill them the cost of utilities. It has been on the market for quite a while and has been marked down ~5k. It is currently listed at $215,000. Other renovated triplexes around the university are in the low $300,000 price range and command about the same amount in rent. The ARV would likely be in the upper $200s.

Property 2 is in a more upscale area. The surrounding houses are around half a million. It is a SFH that is being used as a duplex. It was built in 1962. It needs less major repairs than Property 1. It is in need of cosmetic work (paint, flooring, kitchen reno - approx. $15,000 - $20,000). The lower unit has 3 bed/1 bath with a kitchen and the upper unit has 3 bed/1 bath with a kitchen as well. It is currently being rented out per room for $350/each but would increase to at least $400 per room after renovations. It is currently off-market and the owner would take around $310,000 for it. According to my realtor (who is functioning as my realtor and the seller's realtor) it would easily sell for $340,000 if it goes on market (and has an ARV of ~$375,000). I have the opportunity to get in on the deal while its off-market but I want to make sure I am not buying something that will end up costing me per month. This property has a deck on the second floor and a mini-parking lot behind it which is more than enough to accommodate all 6 tenants.

For both of these properties, I did not include utilities because I plan to find a way to bill the tenants for utilities or run separate meters to each unit. I also did not include PMI which would likely be in the $200-300 range. With how the market is appreciating in this area (10-15% in the past year, and 3-5% in the past month), and given I would be performing renovations, I believe the PMI could be taken off with in the first 1-2 years. I plan to use conventional financing with somewhere between 5-20% down payment. My parents offered to partner with me to be able to qualify for the mortgage and then offered to lend me enough to do a 20% down payment to avoid the PMI, however, would it be better to maybe do 10-15% down and then use the other 5-10% for renovations? With reno + the rapid appreciation in the area, I do not think it would be hard to reach 20% equity in the house in a short amount of time.

That’s awesome! I drive past these apartments frequently. Sounds like you snagged a really great investment. Best of luck!

@Emanuel Eyssallenne @Jacob Laird

I personally haven't joined the triad REIA yet but it is on my to-do list. The value seems to pay for itself, kind of like having a BP pro membership.

I've seen a few small multifamily homes but the good deals seem to be bought up by cash buyers within hours of being posted on the MLS. At this point I am focusing my attention on finding 3-4 bed/2-3 bath single family homes and plan to rent out rooms. And houses of this type are in the 190-230k range if you're in a decent neighborhood. And these houses would only rent for $1300-1650 after turning them into a pure rental.

I have a few friends (non-investors) that have been trying to buy a house/condo in the area and have lost out to all-cash investors. From what I can tell, you need to submit an offer over market value if you want to stand a chance in the triads market. At least when it comes to shopping on the MLS. I regret not starting the search a few years ago!

Hey Emanuel,

I am new to REI and also located in Greensboro. There is a triad REIA and they have a monthly members meeting but they also have sessions every Tuesday at lunch I believe.

It’s definitely a sellers market right now. I am in the process of looking for my first investment property as a house hack and I will say it’s been pretty challenging in the current market. Lots of people are coming to the triad to invest currently.

@James Carlson

I appreciate the response. You raise a lot of good points, and I am definitely in the same boat with sharing living spaces haha. If I were to section off a basement for tenants, I am guessing you would still share common areas like a kitchen and den? I am not exactly sure how that works. But it definitely sounds more favorable to splitting rooms. Then again, I am not totally opposed to renting out room by room.

@Jason Coleman

Thank you for the comment. Do you know of some good middle class sub-markets in Winston that are appreciating but still reasonably priced for a new investor to look into?

I currently live in Greensboro. I drove through the neighborhoods around WSSU and it seems to be very class C, boarded up windows, dilapidated buildings and such. I also noticed houses in the neighboring areas (5-10 mins away) are still quite cheap (like lower $100,000s). I am not sure how accurate this information is, but when I looked these homes up on places like Zillow, it seems like the value of those houses have depreciated from what they were 10 or 15 years ago. How do scout out a good area to buy in? I definitely wouldn't want to buy a house in one of these areas and it just continues to depreciate in the upcoming years.

Also, the tax-assessed value for some of these are like $20,000-50,000. How does that value actually line up with what the house is actually worth? I read somewhere that it should be within $15,000 of the actual value of the home but I am not sure how accurate that is.

@Sean Rooks

Sounds good, I appreciate it Sean! A house-hack analysis calculator would be great. Although I am assuming I probably should anticipate little to no cash flow for as long as I’m living in one of the units unless I find a property with at least 3 or 4 units that could off set my living costs a bit more.

@Antonio Cucciniello

Thank you. I was wondering, would my first step be to start looking for the property or should I get pre-approved for financing before I start the search?

Also, I'm not as familiar with this but I've heard people mention just forgoing the FHA loan and getting a conventional loan for 5% down on their first house and with less expensive PMI. And I've also heard people mention there are conventional loans that allow you to roll the rehab costs into the loan as well. I tried looking into this more but everything I've read about conventional loans seems to require a 20-30% down payment. What do you know about this?

Hello BP members!

My name is John and my interest in real estate began towards the end of last year. I currently work as a GrubHub driver and listen to audiobooks and the BP podcasts all day while I am making deliveries. I've read several BP books like "The Book on Investing in Real Estate with No and Low Money Down" and "The Book on Rental Property Investing" by Brandon Turner. And I am currently reading "BRRRR" by David Greene. I decided its finally time to take action so I got the PRO membership to start analyzing investment properties and begin to connect with others in the area.

I recently got accepted into the DPT program at Winston-Salem State for graduate school, which begins in January 2022. I found myself caught between wanting to pursue my newfound interest in real estate and following through with my original plan of becoming a Physical Therapist. But why not pursue both? My long-term goal is financial independence and I see real estate the vehicle to get there, while PT can bankroll my investing. But I see no reason to wait on pursuing real estate for 3 years while I'm in school and rent like everyone else, when I could be building equity in a residence of my own. Hence, my goal for this year is to find a small multi-family home in Winston-Salem that I can house hack while attending the graduate program for the following 3 years. I reckon that I could possibly fill the remaining units with other classmates in my cohort. And if that's not possible, I would search for tenants using a more conventional approach.

I am currently working with around $20,000-$25,000 that I have been growing in the stock market from an initial investment of $5,000 in 2019. I was thinking about utilizing the 203k loan to finance repairs and purchase price for a tri or quad in the Winston area. I do have very good credit, however, my 2-year income history is spotty because I was a full-time student less than a year ago. However, my parents are willing to partner with me on the loan so I can get approved for financing. Another option would be to obtain seller-financing. The final possibility that I've considered is holding off on investing this year and just commute 30 min from Greensboro to WSSU, and continue to grow my stock portfolio. Then after graduating from grad school, I should have enough capital to use the BRRRR method for my first property.

A problem I seem to keep running into is that there seems to be a scarcity of multi-family homes on the market in Winston-Salem and the ones that I see pop up on real estate portals tend to disappear in a matter of days. I was reading some comments on other threads and I saw some BP members suggest looking for single-family homes with an unfinished basement, and renting that out or turning it into a BNB. I honestly haven't thought of that, but I am open to the idea. I have really been trying cross my t's and dot my i's these last few months by intensely researching various aspects of REI and trying think of all the possible ways I could go about this, but I believe I am falling into analysis paralysis.

I look forward to hearing feedback from you guys about the feasibility of this goal and some next steps I could take towards accomplishing this. Thanks!