@Amanuel Abrha - congrats on moving forward with finding your first deal. If you could provide more info it would help others comment. As an example, whats the purchase price, is there any deferred maintenance that would need to be done, what can you get for rent on the basement unit, since you are only buying one side, are there HOA dues. What type of financing are you looking at.
Thanks Andrew, so the listing price is $540,000 I’m planning on offering $517000, the basement is renting for $1200 currently. Financing wise I’m putting 20% down payment. The house was built in 2014, so it doesn’t require any maintenance. There aren’t any HOS fees
The mortgage will be on a five year fixed term with 3.5% interest rate
@Amanuel Abrha - what do you think you could get for rent on the unit you plan to live in? Take all that info and run it through the BP rental calculator. For house hack style deals, I like running numbers on it as if it will be a full rental. If it makes sense to me like that, it just becomes an even sweeter deals as a house hack.
One other thing to note, I am personally trying to stay away from adjustable and balloon financing when all possible. I did several loans with adjustable rates and balloon financing. It worked out great for the time. But where I feel we are at in the market, rates our most likely to be a fair amount higher. If you strategy is to sell in 5 years or less, then the five year fixed term could be good. But with you buying it and planning to live in it, see if you can get a long term fixed rate.
@Amanuel Abrha If the numbers make sense then the deal normally makes sense but consider the other variables like how will the property look in 10 years, will the numbers rise from population trends. We looked at an office building with great numbers but upon closer look noticed that one tenant represented 50% of all the income in the build and there lease was about up, and it was also the only office building in area without an elevator. Numbers don't take that in consideration always. For the basement room you are renting out will it have its own separate entrance or will you have some common space? If the deal has been on the market for awhile, are there any reasons why it has not sold?
Thanks for the feed back guys I will consider those points
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.