All Forum Posts by: Tyler Witkowski

I am also in this situation. I have been depositing my "rent" to cover the Cap Ex, Mait, Vacancy, etc. Into my rental checking account.

I'm about to get book keeping software for this house hack and another duplex. I want to know how to account for this since I dont want it showing up at the end of the year for taxes since its not real "rent"

What is the best way to go about this? What has any other experienced house hackers done?

I think I can make this! I'll check and see if my wife will be able to join as well.

This is great insight guys, thank you for helping me out. It looks like I knew the answer from the beginning, yet I didn't want to see it. 

Back to the drawing board.

I do have financing for my deal, I can take a rehab loan out with using anyone that I want. either myself or a licensed contractor. The best rehab deal I have found around my area.
All I would need is the $11k down, Ive used this rehab deal once before on my current duplex where I have done all the work myself.
You are right though, I keep going to the idea of not enough reward for the work/ risk 
The $25k repairs is from my contractor, who does this for a lot of banks in the area. Not much work needed.
furnaces, bathroom repairs, new load baring wall that last person removed, paint, vinyl plank flooring. and thats just about it.

@Marcus Johnson
That is an amazing property that you have, I wish that my market would allow for this type of cashflow. It simply doesn't though, Its in a state and city where people are fleeing because of our tax rates. The ones that stay are people with stable jobs in hospitals, manufacturing, and jobs like ups/ fedex distributers. Jobs I see as economically stable but with all that said. Rents stay about where they are. 

I understand where you are coming from and with your goals of extreme cashflow, that is a beautiful number. I just dont think its physically capable in my market. the only things that get that are d type properties in the worst of the city. Im not going to deal with that type of clientele. Im going to reflect on this and see where it takes me as the deal unfolds itself. I might be backing out as of right now but if i get more final numbers that make this deal more stable I might still go through. Who knows. I see my market climbing within the next 3-5 years as the city is trying to pump money into it and save the city as a whole.

 Is that a typical number for you area? If so, I need to move to out of state investments.
Ive been looking for about a year now getting cut out of deals for not be a cash buyer and not being able to afford the $120K+ deals at the moments and this is one of the best deals i've found since my first.

I could raise rents after I fix everything up but even then its speculation in my eyes. Im going off what the market is telling me and the make is $700-$750 in this area. im basing my data of the medium of $650 bringing in the $1300 a month. If I rented for the $700 per door I would then be at my goal of $100 per door, but I see this as speculation and not true to my market.
also, we have extremely high property taxes in my area. Last time I checked, 15% Which would be $3200 for 2016

 Can you elaborate? Im not understanding what you mean.

Thank you everyone for replying to this, all of you have good info to reflect on.
To answer everyone at once, I have put in water/ sewer, Garbage, Electric, Vacancy @5%, Maitenance @5%, Capex @10% and management @10%. Im managing this myself.

Ive included all of my expenses so I believe. The building was built in the 60s and in great shape. There is about $20k In repairs, I'm factoring it at $25k with a purchase price of $55k. I see other buildings in the area going for $75k and back in 2007 this property sold for $120k, but thats not todays market. The down payment is $11k, I have others putting in $5k and myself $6k to get this deal. So with the $20K in repairs, that would be fixing all major problems with building, Including 2 new furnaces, 2 Hot water heaters, 2 bathroom remodels, and new flooring in 1 unit. I see it as this would bring down the maintenance and capex costs, leaving me with the cashflow that I need next year when I can tweek the numbers to real maintenance costs. Since i'm unexperienced i'm putting in larger numbers to save, for those "oh ****" moments. its a foreclosure and that last owner remodeled 1 unit completely and looks very nice. 

This will not be owner occupied.

Hello my friends!
Im in the middle of signing a contract with a deal and its really making me nervous. Ive run the numbers and its a good cashflowing property. Well I should say its a great ROI property @ 26.7% to be exact! It makes me extremely nervous because its only at $66 a door. With it being a duplex it will only net $133 cashflow. Im trying to pull the trigger but im getting a weird gut feeling I cant exactly shake off.

The first year before I change the taxable amount for my county it nets the 26% ROI with only $6000 down of my own money bringing in a total of $133 cashflow. The second year I predict it to be 32% ROI, still only $6000 of my own personal money and $163 total cashflow.  I can raise rents slightly higher giving the cashflow i want, but I dont want to rely on a prediction that can possibly fall through, I like to be slightly pessimistic in the beginning of deals. I ideally want $100 per door.

I see great ROI but not a lot of cashflow to justify it.
I want to hear all of your opinions, especially for this being my second rental property, is it a wise decision?