All Forum Posts by: William Burnson

I became licensed to practice real estate a few months ago and am with a broker in Texas. Does this affect being able to invest in real estate as far as wholesaling is concerned? Is that off the table now or can I still do that without isssue? 

Thanks

Hi Nathan! Thanks for responding. 

Yes, the rental income I calculated is the rents of the other 3 units less the PITI. +440/month. This is with rents that are below market value and haven't risen in 3 years.

I just purchased the house very recently, so the rates are still the same as they were when purchased.

Gross rental income after I move out should be closer to the $4,500 range with some cosmetic updates and one units' floor being replaced. 

I eventually want to use a property manager. Definitely. However, with this being my first one, I wanted to spend some time learning what that is like and since I will be living on the property I believe it will be a great opportunity for me to learn. It will be extra work, but I believe it will prove fruitful in the future when I am working with/hiring my own property managers. 

By "talk to the current tenants" I mean I went and knocked on their doors and asked what it was like living there. Asked about the property I wanted to purchase and also asked about the neigborhood. If you let them talk, people will tell you everything you need to know, probably more. 

Its actually called a Conventional 97% Loan. My PMI will be cancelable and requires less fees up front. I'm telling you, my lender is the man.

I plan to be in real estate for the long haul, my man. I'm house hacking this one until I have enough saved to house hack another, which will hopefully be one year. I want to find some investors to begin the BRRRR method as well in the meantime, as that will allow me to go full-time much sooner.

For now as far as structuring goes: Im not using a property manager for this property, although I plan to in the future; for the rest I used bigger pockets calculators. I will be saving all profit from the rental for capex, maintenance, etc. while counting my saved money on rent as income for the property ~$650/month. The rents have not been raised for 3 years in this property so there is some room to grow as well. 

Thanks for your interest! And best of luck finding yours!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $397,000
Cash invested: $11,000

House Hacking a 4 unit property in Winnetka Heights, Dallas. I live in one unit and the other three bring me profit of $440 each month, not including what I used to spend on rent, which was close to $700. According to market rates, the unit I am in should rent out for $1000-1300 once I move to my next property. I will be doing updates to the property as well while I live in it, and update other once tenants that are currently renting move out.

What made you interested in investing in this type of deal?

I read a lot on biggerpockets.com and listened to the podcast. Once I calculated how much money I had wasted in rent in the past 6 years living in Dallas (hint: well over $30,000) I decided to do something about it. House hacking is the best option for me in my current situation so I found a deal.

How did you find this deal and how did you negotiate it?

I found it on MLS. I am also starting out in real estate and I did the numbers and jumped on the property as soon as I saw it. Seller didn't want to pay anything toward closing or title, but also wanted to have to property off his hands. However, I did not have enough cash to pay everything at closing. I gave him a really high number for seller concessions, then in the end we agreed on $2k above asking price for $3k in seller concessions at closing and seller paying the $2500 title policy.

How did you finance this deal?

Straight 97 conventional loan.

How did you add value to the deal?

I am updating the kitchen and bathroom in the unit I will be living in, which are the biggest bangs for your buck as far as appraisals and having good renters and rent prices go.

What was the outcome?

Well, I'm living for free--and when you factor in the cost of rent in Dallas to the amount I'm being paid above mortgage it ends up being $1,050/month in income. I don't hate it.

Lessons learned? Challenges?

Currently in the beginning stages of living there so I still have a lot to learn. But I did have to walk away from a couple deals that I thought would be good after doing due diligence. One thing I can say is to ALWAYS talk to the current tenants at the property.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Schuyler Lehman with First Choice Loans in Dallas. He's the freakin man.