Searching for my first deal
New to Real Estate · South Texas · Member since 2026 · 13 posts · 10 votes
Searching for my first deal
Most Popular Reply
Financial Advisor · FL · Member since 2024 · 441 posts · 99 votes
6moGood move. Starting with a duplex or fourplex is one of the smartest ways to get in.
When you walk the property, think like an investor. Check the rent roll and leases. What tenants actually pay matters more than what the seller says it “should” rent for.
Ask about real expenses. Taxes, insurance, utilities, maintenance.
Look at the big-ticket items. Roof, HVAC, plumbing, foundation. That’s where the real money goes.
Also make sure it’s legally a fourplex and compare rents nearby so you know the upside.
Run the numbers with vacancy and maintenance built in. If it still works, you’re onto something.
If you want, post the numbers here or DM me. I’ll tell you in two minutes if the deal actually makes sense.
All the best,
Stevan
10 Replies
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes6mo
@Robert Gonzalez, a few thoughts:
1. A house hack can be a great strategy. It will be your home for a while so keep in mind what you and your family want/need when looking at homes as well.
2. You MIGHT generate positive cash-flow with a 4-plex because 3 rents may cover the mortgage etc, but it is doubtful that with a duplex that the rent of the 1 unit will cover the mortgage etc.
3. So, while positive cash-flow is typically NOT a goal with a house-hack. You do want to reduce your housing expense.
For example, if you would be comfortable paying $2,000/month for housing for your family and with the house hack the renter(s) are covering most of the mortgage then maybe you only have to pay $1,000 per month out of pocket. That means you can SAVE $1,000 per month from your earnings.
4. Most people buy a rent ready or rent-able property with a house hack. They may be using mortgages like an FHA that requires the property be in good repair to close. These loans also have low down payments.
Also, on a fully amortized 30 year loan, the principle pay-down is negligible in those early years of the loan.
So, how do you think you will be using "equity" from this first property to acquire the 2nd?
5. If you buy a decently maintained property but one in need of cosmetic updates, you might be able to do some rehab work to add value and force equity, but that will likely be limited. Retail buyers are not buying severely distressed properties at discount like flippers and BRRRR investors.
6. Market appreciation is POSSIBLE, but you can't control it and often cannot predict it. Your property might LOSE value the first few years! It happens, but with an income property who cares, you aren't selling or refinancing, you are generating income.
7. Your property's value would have to go up SUBSTANTIALLY to pull money out for the 2nd deal.
For example if you bought a duplex for $300k with an FHA loan. The loan would be maybe $289,500. Most cash-out refinance loans max out around 75% LTV (loan to value) MAYBE 80%.
In order to pull out ANY money even at 80% LTV, the value of the property would need to increase from $300,000 to MORE THAN $361,875! That is the break even point not including the costs to actually obtain the new loan.
8. So, how do you get money for the 2nd deal??? Look back at #3!!! You are paying $1k LESS in monthly housing with this house-hack. You save that extra $1k every month until you have money for the 2nd deal.
9. Once you get into your 2nd house-hack, your 1st deal should start generating positive cash-flow on its own with the additional unit rented and allow you to make money faster!
- New to Real Estate · South Texas · Member since 2026 · 13 posts · 10 votes6mo
Quote from @Kevin Sobilo:
@Robert Gonzalez, a few thoughts:
1. A house hack can be a great strategy. It will be your home for a while so keep in mind what you and your family want/need when looking at homes as well.
2. You MIGHT generate positive cash-flow with a 4-plex because 3 rents may cover the mortgage etc, but it is doubtful that with a duplex that the rent of the 1 unit will cover the mortgage etc.
3. So, while positive cash-flow is typically NOT a goal with a house-hack. You do want to reduce your housing expense.
For example, if you would be comfortable paying $2,000/month for housing for your family and with the house hack the renter(s) are covering most of the mortgage then maybe you only have to pay $1,000 per month out of pocket. That means you can SAVE $1,000 per month from your earnings.
4. Most people buy a rent ready or rent-able property with a house hack. They may be using mortgages like an FHA that requires the property be in good repair to close. These loans also have low down payments.
Also, on a fully amortized 30 year loan, the principle pay-down is negligible in those early years of the loan.
So, how do you think you will be using "equity" from this first property to acquire the 2nd?
5. If you buy a decently maintained property but one in need of cosmetic updates, you might be able to do some rehab work to add value and force equity, but that will likely be limited. Retail buyers are not buying severely distressed properties at discount like flippers and BRRRR investors.
6. Market appreciation is POSSIBLE, but you can't control it and often cannot predict it. Your property might LOSE value the first few years! It happens, but with an income property who cares, you aren't selling or refinancing, you are generating income.
7. Your property's value would have to go up SUBSTANTIALLY to pull money out for the 2nd deal.
For example if you bought a duplex for $300k with an FHA loan. The loan would be maybe $289,500. Most cash-out refinance loans max out around 75% LTV (loan to value) MAYBE 80%.
In order to pull out ANY money even at 80% LTV, the value of the property would need to increase from $300,000 to MORE THAN $361,875! That is the break even point not including the costs to actually obtain the new loan.
8. So, how do you get money for the 2nd deal??? Look back at #3!!! You are paying $1k LESS in monthly housing with this house-hack. You save that extra $1k every month until you have money for the 2nd deal.
9. Once you get into your 2nd house-hack, your 1st deal should start generating positive cash-flow on its own with the additional unit rented and allow you to make money faster!
Thanks for your insights Kevin! I appreciate your thoughts on this. Keep in mind I'm only 20 and planning to start real estate investing so I wouldn't say I'm an expert on this subject by any means. Regardless, to answer your question, I plan on using a HELOC as a way to finance my second deal. With the equity from my first deal whether it have gone up in one year or three I could potentially fund my second deals down payment. While relying on the idea like you mentioned on #9.
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes6mo
Quote from @Robert Gonzalez:
Quote from @Kevin Sobilo:
@Robert Gonzalez, a few thoughts:
1. A house hack can be a great strategy. It will be your home for a while so keep in mind what you and your family want/need when looking at homes as well.
2. You MIGHT generate positive cash-flow with a 4-plex because 3 rents may cover the mortgage etc, but it is doubtful that with a duplex that the rent of the 1 unit will cover the mortgage etc.
3. So, while positive cash-flow is typically NOT a goal with a house-hack. You do want to reduce your housing expense.
For example, if you would be comfortable paying $2,000/month for housing for your family and with the house hack the renter(s) are covering most of the mortgage then maybe you only have to pay $1,000 per month out of pocket. That means you can SAVE $1,000 per month from your earnings.
4. Most people buy a rent ready or rent-able property with a house hack. They may be using mortgages like an FHA that requires the property be in good repair to close. These loans also have low down payments.
Also, on a fully amortized 30 year loan, the principle pay-down is negligible in those early years of the loan.
So, how do you think you will be using "equity" from this first property to acquire the 2nd?
5. If you buy a decently maintained property but one in need of cosmetic updates, you might be able to do some rehab work to add value and force equity, but that will likely be limited. Retail buyers are not buying severely distressed properties at discount like flippers and BRRRR investors.
6. Market appreciation is POSSIBLE, but you can't control it and often cannot predict it. Your property might LOSE value the first few years! It happens, but with an income property who cares, you aren't selling or refinancing, you are generating income.
7. Your property's value would have to go up SUBSTANTIALLY to pull money out for the 2nd deal.
For example if you bought a duplex for $300k with an FHA loan. The loan would be maybe $289,500. Most cash-out refinance loans max out around 75% LTV (loan to value) MAYBE 80%.
In order to pull out ANY money even at 80% LTV, the value of the property would need to increase from $300,000 to MORE THAN $361,875! That is the break even point not including the costs to actually obtain the new loan.
8. So, how do you get money for the 2nd deal??? Look back at #3!!! You are paying $1k LESS in monthly housing with this house-hack. You save that extra $1k every month until you have money for the 2nd deal.
9. Once you get into your 2nd house-hack, your 1st deal should start generating positive cash-flow on its own with the additional unit rented and allow you to make money faster!
Thanks for your insights Kevin! I appreciate your thoughts on this. Keep in mind I'm only 20 and planning to start real estate investing so I wouldn't say I'm an expert on this subject by any means. Regardless, to answer your question, I plan on using a HELOC as a way to finance my second deal. With the equity from my first deal whether it have gone up in one year or three I could potentially fund my second deals down payment. While relying on the idea like you mentioned on #9.
Unless you do some significant rehab work on your 1st deal, its unlikely you will have equity to get a HELOC in 1-3 years for a down payment on the 2nd deal. I would focus on my own housing expense being less with a house hack and saving up a 2nd down payment month by month.
Even if you could do a HELOC, keep in mind that might make the 1st deal not cash-flow at all with the added debt.
- Lender · Florida / Georgia · Member since 2025 · 58 posts · 28 votes6mo
Hey Robert,
I can tell you from a finance perspective to make sure you have funding in place. If you are going to house hack. Ask your lender about going conventional and using one of the Fannie Mae programs that will allow you to use 75% of the rents towards your debt to income. This will help with how much you can afford. Check the taxes on the property. If you are going to be living in it you will likely be assessed at a different tax rate. Which could also help your DTI ranges if they happen to come out tighter.
When you are at the properties ask the basics first ( i.e condition of electrical, plumbing, roofing ). Then get P&Ls from the landlord so you can see expenses and ROI. If you go under contract during your inspection period you want to get the real P&L's produced by their CPA so you can really know the true numbers.I would say as a first time house hack. Look for a value add situation that doesn't require a lot of work but needs some cosmetic upgrades. Make sure when it is all said and done. Your rents cover the mortgage and you have a good amount of cash flow as cushion to build up for capex.
I might have missed some steps but those are things I would tackle first. Good luck to you Robert
- Financial Advisor · FL · Member since 2024 · 441 posts · 99 votes6mo
Good move. Starting with a duplex or fourplex is one of the smartest ways to get in.
When you walk the property, think like an investor. Check the rent roll and leases. What tenants actually pay matters more than what the seller says it “should” rent for.
Ask about real expenses. Taxes, insurance, utilities, maintenance.
Look at the big-ticket items. Roof, HVAC, plumbing, foundation. That’s where the real money goes.
Also make sure it’s legally a fourplex and compare rents nearby so you know the upside.
Run the numbers with vacancy and maintenance built in. If it still works, you’re onto something.
If you want, post the numbers here or DM me. I’ll tell you in two minutes if the deal actually makes sense.
All the best,
Stevan
- New to Real Estate · South Texas · Member since 2026 · 13 posts · 10 votes6mo
Quote from @Stevan Stojakovic:
Good move. Starting with a duplex or fourplex is one of the smartest ways to get in.
When you walk the property, think like an investor. Check the rent roll and leases. What tenants actually pay matters more than what the seller says it “should” rent for.
Ask about real expenses. Taxes, insurance, utilities, maintenance.
Look at the big-ticket items. Roof, HVAC, plumbing, foundation. That’s where the real money goes.
Also make sure it’s legally a fourplex and compare rents nearby so you know the upside.
Run the numbers with vacancy and maintenance built in. If it still works, you’re onto something.
If you want, post the numbers here or DM me. I’ll tell you in two minutes if the deal actually makes sense.
All the best,
Stevan
Hello Stevan! Thanks for sharing your thoughts on this. I most definitely will check up on this post after I check out some local deals. By running the numbers, where would you suggest I start? Should I use some specific software? Could I rely on my own spreadsheet? perhaps the BP rental calculator if I'm willing to pay the monthly fee of course. If anything what are the steps you take to analyze a deal first-hand?
- Financial Advisor · FL · Member since 2024 · 441 posts · 99 votes6mo
You don’t need fancy software to analyze your first deal. A simple spreadsheet works fine.
Start with four numbers:
Purchase price
Total monthly rent from all units
Taxes + insurance
Loan paymentThen subtract vacancy and maintenance. I usually assume about 10% combined. If the property still makes sense after that, it’s worth looking deeper.
Also verify the rent roll and leases. What tenants actually pay matters more than “market rent.” And always check the expensive stuff first: roof, HVAC, plumbing, foundation.
One quick tip since you mentioned HELOC. Don't rely on appreciation. The real power of house hacking is lowering your living cost and saving cash for the next deal.
If you want, post the numbers from the fourplex you’re touring. I’ll break it down quickly and tell you if it’s a real deal or just a listing that looks good on paper.
All the best,
Stevan
- 6moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
You're going to want to assess how much money you need to put into the place.
You want to look at condition of the units, age of mechanicals, and roof. Those are going to be your bigger ticket item.
after that, I'd encourage you to get a sewer scope if you get the property under contract.
Brick House CPAs53 Reviews - Lender · Miami, FL · Member since 2025 · 121 posts · 33 votes6mo
Hi Robert,
Congratulations on taking this step!Ask the sellers if there are any known immediate or near term repairs that are necessary. This will come up in the inspection phase but you might save yourself time by asking up front.
The market is on the side right now so make sure to ask for seller credits to cover closing costs.
- 6moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Robert Gonzalez:
Hello BP!! after speaking to a local real estate investor agent, we decided to move forward with searching for my first real estate property. My strategy is going to be house hacking. I will be searching for either a duplex or fourplex property that produces cash flow while building equity. I plan on using the equity on the building to fund my second deal. With this in mind, my agent confirmed that we will be visiting 2 listing locations near me. I believe both listings will be fourplexes. What are some things I should keep in mind while checking out the property? What are some questions I could ask the seller or my agent while viewing the property? What are some key aspects I should be look out for in the structure/integrity of the home? I'm open to sharing more info if it means acquiring better advice. Thank you!
Ask your, "investor-friendly" agent why these are deals you should buy.
95%+ agents are really only commission-friendly and investors should NOT be working with them!
If they can't help you calculate ROI, cash-on-cash, etc., what value are they really bringing other than scheduling showings?
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