House hack in the saint Louis area

5 Replies

Just bought my first house, multi family on the south side of saint Louis. 

4 family, 1br 1bath units. Each rents for 400-450 depending on updates has a full basement and 3 car garage which I plan on using for myself seeing as it's in slight disrepair.

I will be living in one with a friend so she will be paying $200.

The monthly payment on the house is $780 

My plan was to take the $720 positive cash flow and put an additional $450 per month for my rent into a savings until I reach $5000 for a safety net then put the extra $1,170 towards the mortgage until it's paid off.  

And find a second 4 family hopefully before the end of the year for a similar strategy

Seems like you have a good idea and a good strategy.

Once you save to $5,000, instead of paying off your complete mortgage with the $1170 why not split that in half?

Send $585 towards the first mortgage, and send the other $585 into savings. When you go to your next project the banks wants to see reserves for down payments and emergencies. 

Keep up the good work.

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Exciting stuff!  I would love to cash flow on my primary residence.  When do you move in?  Are the other units rented out in the current shape?  

That's a great idea to split it between savings and the mortgage, it took me almost 8 weeks to close and It would have been much more simplified if I had more cash reserves.

I was supposed to move in on the 20th however the tenant in the unit I was going to occupy hasn't left and it was only word of mouth from the seller on when he would vacate. So I am afraid I'll have to start the eviction process.

The building is fully rented but they are all on month to month leases, so we will see what happens when I require them to sign 1 year leases.

I like your plan.  You live for free, but you keep putting what would have been your monthly rent into savings.  Use it to pay down the principal, make a down payment on another property, or reserves for an emergency.  But you have to account for expense.  That $720 a month cash flow you mentioned only accounts for your mortgage and I'm guessing taxes and insurance as well.  You also will have repairs, maintenance, and vacancies.  Are the units metered separately for water?  If not, you will have a water bill too.  See if you can get an expense statement from the former owner of what those expenses were over the last few years.  That will give you some idea of what to plan for.   

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