All Forum Posts by: Tyler Rodgers

I went and looked at a three unit property in my town yesterday. I would be buying it as a house hack type deal with the intention of moving out and renting the third unit in a couple years.

I've been running numbers, and it seems like a pretty good deal to me, but this would be my first investment property, so I am a little nervous, and hoping for some feedback. Thanks in advance for the help!

The property consists of a tiny, maybe 350 square foot, 1/1 house and a duplex. Each side of the duplex is a 2bed/1ba with its own single car garage. The garages separate the units from each other. Current tenants have all been there between four and ten years.

The house is reported so have some deferred maintenance issues that need addressed, but is not available for viewing until an offer is accepted. From the outside, I can see it needs new paint and exterior doors, but the roof looks good.

On the duplex, the roof and gas furnaces are newer, and the place seems to be in good repair, other than needing paint. I was able to walk through one of the units and meet the tenant yesterday. At least that unit seemed clean and well-kept with no visible issues. He also informed me that the tenants pay their own water, sewer, and garbage.

Okay, for those still with me, on to the numbers!

Asking price $149k

Current rents 450/450/350 or $15k/year

Insurance (per mls listing. I still need to get my own quote) 864 annual

Taxes per mls 3089 annual

I am estimating 10% vacancy or 1500/year.

20% maintenance and capex or 3000/year

I figure that at asking price and current rents, I would be losing about $2600/year if I put 20% down with 5% interest. Where I think it gets interesting is if I offer only $125k and raise the rents to 600/600/450. This is still at the low end of market in this neighborhood I think. With the same percentages for down payment, vacancy and maintenance, I calculate net operating income of $825 and a mortgage of $537, giving me just under $100/door cash flow once I rent the third unit back out.

For those that read this far, thank you, and does this sound like a good deal?

Welcome!

Way to go Brady. You're killing it!

Thank you

I tried that in another thread. Didn't seem to work... @naveed q.

Thank you Mike cumbie. That's a good perspective. Side note, how do I tag people in my posts? Thanks. I'm such a newbie...

@wayne Brooks this is my primary residence. I've lived in it 3 years. I expect to end up with about $50k minus selling costs. About 8k loan paydown and about 40ish in appreciation.

@samantha Klein and @dave foster thank you for clarifying the 1031 thing for me. This is all new to me.

Thanks for the advice. I thought about the Heloc, but I'm not sure if I can get financed to carry both mortgages and a HELOC. I guess I won't know until I ask though.

I'm not sure if this is the correct area for this, but I am definitely just "starting out", so here goes...

I want to sell my house and buy my first multi. Using a 1031, do I have to actually spend all the money I get from sale? I would like to us my home equity for a down payment, cash reserves, and maybe the start of my next down payment, but idk if this will hurt me come tax time. Thank you!

My wife and I want to start our investment career by selling our current sfh and moving into a 2-4 unit multi family. Our reasons for this are twofold.

First, the roughly $50k in equity we have would give us money for down payment, closing costs, and cash reserves without having to deplete our emergency fund or spend the next couple years saving before we can invest.

Second, we want to take advantage of owners occupant financing such as FHA on this deal to get the low interest rate and down payment as this seems like the easiest way to get started.

My question is what order of operations do you folks recommend? Do we put our place on the market first and sell with a contingency of us purchasing a new place first? Or get pre approved for a loan and start making offers to buy with a contingency that we must sell our house before we can close? The third option, as I see it, would be to sell, close, and move with my wife and two kids into a rental or with family while we look for a new place, but I would prefer not to move them twice unless absolutely necessary. 

I am confident that my house will sell fast in my market, as they all seem to sell within a week lately, but the inventory of multis is fairly low, so it might take a while to find the right deal to buy. 

Thank you for taking the time to read and help a newbie!