All Forum Posts by: George Turner

@Matthew Porcaro Cool - that was my next step...Thank you!

@Matthew Porcaro Yep its the same owner. 

Hi All,

I am working on a potential deal in the Columbus Ohio area. It's a gutted duplex with a continuous parcel behind it that has plans for a carriage house. Both are INDIVIDUALLY listed. My question is can I use a 203K FHA to buy and rehab both parcels under one loan? I've read a bit about how the FHA distinguishes between "excess land" and "surplus land"...I think this would fall into the "surplus" category since the land with carriage plans cannot be sold separately but I am unsure of the 203K portion and the fact the carriage house is not built yet. Figured this forum is a good place to start.

Any tips or point in the right direction would be greatly appreciated! I plan to speak with a broker once I am a bit more familiar with this use case.

@Lien Vuong @Adam Sankowski  This information has been extremely helpful so thank you for sharing. I currently live in Chelsea and am planning on the  owner occupied route as my initial investment. I think using the first property as a "bank" is great (in this market) as that is exactly what I want to do. It's nice to hear other people have accomplished something similar.

Would love to know more about how the 203k process has worked for you (if you have done it before). I have an idea on my strategy and am working towards a $20k DP (FHA). I'd love to be in the Malden,Medford, Melrose areas.

Thanks!

Hey Mike,

Thanks for the response, especially on utilities. I will definitely keep that in mind moving forward.

I was considering the FHA specifically for the down payment advantage. I'm not sure the market will allow a 1 br to rent any higher than $600 (though I could be wrong here). It seems the FHA route for this wouldn't be appropriate.

Going to try an analysis with a traditional mtg and see what that looks like. Thanks!

Hey James,

Thanks for the reply!

My thought was that even though its owner occupied, they would pay the $500/month. Would you still consider that income?

Hey all,

My name is Tre and I'm just running the numbers are properties. Figured I would post this here and see what you all thought.

For this MF, they are asking $129,900 and I would use an FHA at 3.5%.

Income:

Rent - Market comps suggest ~$500/unit (It's a duplex)

Total - $1000

Expenses:

PITI - $962 (Assuming national avg for home insurance)

PMI - $155

Vacany - $90 (8%)

CAPEX - $56 (5% - windows done in 2002, new roof/gutters in 2008, furnace and A/C with separate zoning done in 2003 and electrical panel box 2013-14)

Property Management - None. Owner managed

Utilities - $25 (Garbage)

TOTAL - $1,288

Cashflow:

Monthly income - $1000

Monthly expenses - $1288

Cashflow - ($288)

COC Return:

Downpayment - $4,600

Closing - $3200 (est. 2.5% of PP)

Rehab - None

Misc - None

Total Cash investment - $7800

COC % = ($288)/ $7800 = -3.7%

Hear me out - Now I know these are not good numbers at this purchase price. But the property is in a very stable working class neighborhood with low vacancy. I suspect I could get this under contract @ $105,000 and increase rent to $600/unit

New analysis:

Income:

Rent - $600/unit

Total - $1200

Expenses:

PITI - $843 (Assuming national avg for home insurance)

PMI - $125

Vacany - $67 (8%)

CAPEX - $42 (5% - windows done in 2002, new roof/gutters in 2008, furnace and A/C with separate zoning done in 2003 and electrical panel box 2013-14)

Property Management - None. Owner managed

Utilities - $25 (Garbage)

TOTAL - $1102

Cashflow:

Monthly income - $1200

Monthly expenses - $1102

Cashflow - $98

COC Return:

Downpayment - $3675

Closing - $3100 (est. 3% of PP)

Rehab - None

Misc - None

Total Cash investment - $6775

COC % = $98/ $6775 = 1.44%

Now the listing says this has great income potential, but given this area has very slow growth, I would have to get this at a discount >25% for any real income potential which leads me to believe there isn't much here. What do you think?

P.S. this is one of my first analysis so I am sure I missed things. Any insights would be greatly appreciated.

@Steve Racicot @Thomas S. Ahh, good to know! thanks all

@Randy Johnston Thank you for your response. Yes, Portland, Oregon. By development, I simply meant the property has an HOA and I wasn't sure if they can set their own rules about converting single family homes into duplexes. But it seems like that doesn't matter? I am NOT considering converting into condos. I appreciate the info!

Hey all,

I am currently researching zoning laws in the Portland area and I had a question regarding R3 zoning. If a property falls in the R3 zone but is a single family home, can it be converted into a duplex/triplex/etc? Also assuming the apartment is in a development (Strong HOA), does that change things? I understand R3 is a multi-dwelling zone, but not sure about the specifics. Anything helps! Thanks in advance