First Deal - House Hack property
Accountant · Phoenix, AZ · Member since 2016 · 31 posts · 8 votes
Going to be honest here - I am not sure this is a great deal... Maybe a good deal, maybe an acceptable deal but not a great deal as it stands.
If I decide to buy this - it will be my first investment property, my first house hack. Basically, I am going to be okay if I break even. The phoenix market seems to be scarce in quality duplexes at the moment.
Specs:
Duplex- built in 1945
Price - 235K
Down PMT - 8k
2bed 1 bath units
In a good neighborhood - value has gone from $160k to $230 in 4 years
Duplex - two free standing units
Needs a little TLC/updating
rents from past landlord - $650 and $750, but I hope to raise rents after units have been renovated.
Guessing my debt service and expenses will come out to around $1,700 each month?
I appreciate any tips or thoughts on this as it could be my first deal!
@Account Closed
Hi Sarah, you will find me a dissenting opinion on the majority of those who will answer because most people are concerned about cash flow.
I did exactly what you are doing now, house hacking and breaking even or even paying slightly into my costs.
I don't buy for Cash Flow NOW. I but for Cash Flow in the Future. That also has the added bonus of Appreciation in Value.
That being said, doing the necessary calculations is NOT Easy, but is absolutely necessary.
For instance, every area has it's appreciation rate. NYC, for example, is much better than the national average of 4% per year Appreciation. We get somewhere around 8% to 10%. If you picked the right areas of NYC, you will get even better than that.
As a REAL example, in the year 2000, I bought a 2 Family building for $140k Purchase Price, 15% down or $21k down with a Mortgage of $119k. So the total Investment was $21k plus $9k in Closing for $30k.
Today, I can sell the building for $1 Million conservatively.
The rents for each unit was $500 back in 2000. Today, it's $1,850 EACH.
I also like to use the disclaimer that Past Performance is NOT indicative of Future Performance.
However, people need to use their Intellects to take into account ALL the parts of a Real Estate Investment, including Cash Flow, Appreciation, Mortgage Balance Reduction and Tax Savings.
For the above property, the appreciation rate was 12.26%. I put together a chart here:
Obviously, not all markets are going to be like Brooklyn, NY and especially in my area, Windsor Terrace. BUT, as great as my neighborhood was for appreciation over the last 17 years (which, btw, included 2 BIG downturns), it was far less than the appreciation rate in Williamsburg, Brooklyn. So I really missed the boat on buying in Williamsburg. Oh well.... I'm still doing great.
So, giving the above appreciation rate and the dynamics for this property, the ROI is crazy and I calculated it here:
So I invested $30k in the year 2000. If I were to sell today I would get back $845k after paying off the Mortgage, Commission at 5% and some seller's closing costs.
YES, I made a 2,717% ROI.... or a 160% per year ROI per YEAR. NOTE... this is NOT a Compounded Rate of Return but a Straight Simple Interest Calculations. I use this calculation because many Investors don't really understand Internal Rates of Return (IRR) and how to use it. So I stick with the simple calculations.
I would also like to mention that I've achieved these kinds of results not once, but 8 times throughout my 2 decades of experience.
Also keep in mind having a discount on the Purchase Price is not NECESSARILY the important thing. The FUTURE VALUE is much more important. Too many are focused on a Discount and turn away great properties that could be a gold mine in the future.
HOWEVER, there is a lot to analyze because determining the Appreciation Rate and calculating your ROI is NOT an easy task!
You need to know the following:
- Economics of your area that will affect it's future value. Things like Migration of people, placing demand on housing needs versus the supply of housing. Knowing things like New Permits, etc. helps. Also knowing the local companies and their impact on housing. For instance, Detroit was 90% dependent on Domestic Auto. The Companies failed and Detroit went bankrupt. It's REALLY Important.
- City Planning. Finding out how the areas are being rezoned to meet demands. Are parks being created? What about public Transportation such as subways, buses, etc?
- Amenities such as upscale restaurants, dog walks, cafes, etc.
- National and Global economics. For instance, the crash of 2008 followed by most of Europe declining. So anywhere where Europeans had a vacation presence would have been affected, especially European vacation spots. Now we have Climate change problems causing migration of people. Just today I got a call from a Puerto Rican Lawyer asking about vacancies because he is moving his family to NYC.
There are a lot of things to know in order to determine what the future looks like.
While this is very difficult for most people, if you really did your homework, you can only imagine how much the rewards will be for your hard work.
ANYWAY..... I'm one of a very few of us who buy based on Future Value (FV). In great cities like SF, NYC, and I believe, Phoenix, you cannot just use Cash Flow NOW calculations. So please research Phoenix! Look especially at it's future potential and what money is flowing to where in Phoenix!
Hopefully this posts is helpful and gives a different opinion than the standard Cash Flow NOW!
@Account Closed, my main concern with this is: paying FULL market value - and HOPING prices keep going up.
Once you take into account vacancy allowance, maintenance and other costs that you haven't included in your PITI payments, it'll cost you MORE to live there - than if you just rented there.
On that basis, my recommendation is: if you can back out with no penalty, perhaps you should.
Questions you SHOULD ask before buying include: Am I getting a bargain (from a motivated/distressed seller)? Is there a significant value-adding opportunity which will allow me raise its value by more than my cost? Is there a legitimate reason to believe that this very spot is undervalued compared to what it should be? All the best...
I was thinking along those lines also. Paying market value will not help me in this situation. Although prices have been going up who knows if the area will continue to appreciate in value?
Thanks for your insight.
Rents are way under market right now. The past owner is a tired landlord who very obviously did not take care of property. When I walked through it, smoke alarms were taken out of the walls and he hadn't installed a window in the back unit so there was nothing more but a covering over it. My plan was to clean and do a face lift on the property - bring rents to market price and break even each month(without me paying rent). Also - the tenants are on month to month which signals to me maybe they were not good tenants?
@Account Closed
Hi Sarah, you will find me a dissenting opinion on the majority of those who will answer because most people are concerned about cash flow.
I did exactly what you are doing now, house hacking and breaking even or even paying slightly into my costs.
I don't buy for Cash Flow NOW. I but for Cash Flow in the Future. That also has the added bonus of Appreciation in Value.
That being said, doing the necessary calculations is NOT Easy, but is absolutely necessary.
For instance, every area has it's appreciation rate. NYC, for example, is much better than the national average of 4% per year Appreciation. We get somewhere around 8% to 10%. If you picked the right areas of NYC, you will get even better than that.
As a REAL example, in the year 2000, I bought a 2 Family building for $140k Purchase Price, 15% down or $21k down with a Mortgage of $119k. So the total Investment was $21k plus $9k in Closing for $30k.
Today, I can sell the building for $1 Million conservatively.
The rents for each unit was $500 back in 2000. Today, it's $1,850 EACH.
I also like to use the disclaimer that Past Performance is NOT indicative of Future Performance.
However, people need to use their Intellects to take into account ALL the parts of a Real Estate Investment, including Cash Flow, Appreciation, Mortgage Balance Reduction and Tax Savings.
For the above property, the appreciation rate was 12.26%. I put together a chart here:
Obviously, not all markets are going to be like Brooklyn, NY and especially in my area, Windsor Terrace. BUT, as great as my neighborhood was for appreciation over the last 17 years (which, btw, included 2 BIG downturns), it was far less than the appreciation rate in Williamsburg, Brooklyn. So I really missed the boat on buying in Williamsburg. Oh well.... I'm still doing great.
So, giving the above appreciation rate and the dynamics for this property, the ROI is crazy and I calculated it here:
So I invested $30k in the year 2000. If I were to sell today I would get back $845k after paying off the Mortgage, Commission at 5% and some seller's closing costs.
YES, I made a 2,717% ROI.... or a 160% per year ROI per YEAR. NOTE... this is NOT a Compounded Rate of Return but a Straight Simple Interest Calculations. I use this calculation because many Investors don't really understand Internal Rates of Return (IRR) and how to use it. So I stick with the simple calculations.
I would also like to mention that I've achieved these kinds of results not once, but 8 times throughout my 2 decades of experience.
Also keep in mind having a discount on the Purchase Price is not NECESSARILY the important thing. The FUTURE VALUE is much more important. Too many are focused on a Discount and turn away great properties that could be a gold mine in the future.
HOWEVER, there is a lot to analyze because determining the Appreciation Rate and calculating your ROI is NOT an easy task!
You need to know the following:
- Economics of your area that will affect it's future value. Things like Migration of people, placing demand on housing needs versus the supply of housing. Knowing things like New Permits, etc. helps. Also knowing the local companies and their impact on housing. For instance, Detroit was 90% dependent on Domestic Auto. The Companies failed and Detroit went bankrupt. It's REALLY Important.
- City Planning. Finding out how the areas are being rezoned to meet demands. Are parks being created? What about public Transportation such as subways, buses, etc?
- Amenities such as upscale restaurants, dog walks, cafes, etc.
- National and Global economics. For instance, the crash of 2008 followed by most of Europe declining. So anywhere where Europeans had a vacation presence would have been affected, especially European vacation spots. Now we have Climate change problems causing migration of people. Just today I got a call from a Puerto Rican Lawyer asking about vacancies because he is moving his family to NYC.
There are a lot of things to know in order to determine what the future looks like.
While this is very difficult for most people, if you really did your homework, you can only imagine how much the rewards will be for your hard work.
ANYWAY..... I'm one of a very few of us who buy based on Future Value (FV). In great cities like SF, NYC, and I believe, Phoenix, you cannot just use Cash Flow NOW calculations. So please research Phoenix! Look especially at it's future potential and what money is flowing to where in Phoenix!
Hopefully this posts is helpful and gives a different opinion than the standard Cash Flow NOW!
@Llewelyn A, that's a great thought to buy for FUTURE value. But, I reckon in 2017 we're in a very different part of the real estate cycle than we were in 2000. And, we also need to allow for being somewhat WRONG in our assumptions, right? Which in 2017, I reckon means: putting heavy weighting on not being out of pocket for your investments on a month to month basis. Cheers...
Rents are way under market right now. The past owner is a tired landlord who very obviously did not take care of property. When I walked through it, smoke alarms were taken out of the walls and he hadn't installed a window in the back unit so there was nothing more but a covering over it. My plan was to clean and do a face lift on the property - bring rents to market price and break even each month(without me paying rent). Also - the tenants are on month to month which signals to me maybe they were not good tenants?
In theory, this IS the very type of property and Seller that you should be buying from. What seems to be letting that theory down is: Just how "tired" is he, if he still expects to sell for full ARV market value, when he hasn't kept it at ARV standard? It's current value is $235k if YOU pay $235k, but, that doesn't mean anyone else in the world would.
Your plan to "clean and do a face lift on the property - bring rents to market price and break even each month (without me paying rent)" is admirable, but, is it realistic with THIS one? Can you re-analyze it, quoting the market rent, then work backwards to see at what price you'd need to get it for in order for your plan to be viable? Good practice, right?...
@Ryan Swan - Sure the property is just south of Indian School road - 3905 N 13th Way. What is your input on this property? The inspection is Friday - I will likely decide after that if I will go through with the purchase. Thanks!
Hi Brent. I believe @Account Closed is house hacking. While she is house hacking, her cash flow is break even.
IF she was NOT house hacking, she would have been positive Cash Flow. Sarah can confirm that.
By her House hacking, what she is doing is not getting a cash flow. The Cash Flow she would have gotten had she NOT house hack to me is thought of as her Rent. So, if she were to receive $1,700 for Cash Flow had Sarah NOT moved in, but receives ZERO because she lives in her Investment, then her rent to herself is $1,700 and the $1,700 is really her positive cash flow.
She also saves a lot in taxes as she declares less Income. If her equivalent rent is $1,700. She would have had to declare $1,700 x 12 months or $20,400 in extra income. She doesn't have to do that anymore because she lives in the property.
She can also take advantage of Owner Occupied Mortgages which are generally lower in Interest Rates by1% less than full Investment Loans. Someone else can confirm the difference or Sarah can do the research to see if that's true.
There are also rules in regards to LTV. The House Hacking allows her to have a higher LTV.
There are too many great advantages to her house hacking to NOT take advantage of it.
AND, as I was pointing out in my previous posts, you can get FANTASTIC returns such as my 160% ROI per year for 17 years.
Don't forget, in those 17 years that I held the property I used in that example, I went through at least 2 MAJOR downturns, the Great Recession of 2007/8 and the stock market crash of 2001 and yet achieved a 160% ROI per year for 17 years.
If you buy in the right location, you get astronomical returns despite major crashes. AND, another point, both of those two Crashes were ground zero in NYC. 2001 Crash was mostly due to the terrorist event 9/11 and the great recession was a Wall Street Meltdown. Yet, I achieved phenomenal returns.
There are reasons why that's the case, especially in NYC.
For instance, NYC happens to be one of the International Cities that the world wants to invest into when times are tough. We call it "Flight to Safety." So when the other Global areas are doing bad and there is a dip in NYC properties, there is a rush from International Money to buy NYC properties, propping up falling prices.
I'm not sure about the dynamics of Phoenix, but from what I have heard, it's a great place to Invest these days. Sarah will have to do her research to see if the future dynamics of Phoenix can shield her of inevitable Market Downturns.
This is what I fully believe is the epitome of what we all know of as "Location, Location, Location." If your property can shield you from the Market Downturns and yet still do fantastic in the Market upturns because you never have to shield the Investment on the way up, you have a fantastic location. That's the areas I invest in within NYC. It's expensive, but for the right reasons. It's what I call an implied PUT Option for those who trade in the Stock Market. When Markets fall, it has protection on the way down.
I don't want to get too complicated, but I believe certain Cities has become Shields (or as Warren Buffett calls it in the Stock Market, "MOATS") just recently. Those certain Cities have protection in the down market. I'm not sure if Phoenix is one of them, but I've heard it's doing fantastic in the post Great Recession.
I would urge Sarah to do her research to make sure that Phoenix can withstand a Market downturn, which I believe it can, but I have not done the research myself.
It's an up and coming area, and hopefully will continue to play off the revitalization of downtown Phoenix area. Many others here have already given you a financial analysis, so here are some thoughts from a different angle:
1) I respect your desire to start investing and house hack, but make sure you will actually be comfortable living (alone?) in this neighborhood. On that same note, you could further boost your ROI/cashflow if you house hack with a roommate.
2) Don't over improve, and be conservative with your post renovation rent numbers.
3) Looking at the listing photos, I see families with multiple children living in the units. Have you really thought about the implications of serving these long time tenants non-renewal notices? I have a lot of investor clients who analyze properties on spreadsheets and talk about raising the rent, but then don't take into account the human side of that process. You will likely meet the tenants and step inside their homes on Friday during your inspection.
4) If you are doing owner occupied loan, the lender will expect you to be living in the property within 60 days. Keep that in mind with point 3 above.
@Llewelyn A., while I respect your historical returns in NY (I've received similar phenomenal growth in Melbourne, Australia during those same years), I personally wouldn't be recommending buying in Melbourne TODAY (2017) unless you didn't care about the hemorrhaging of hundreds/thousands of dollars every month to buy there ie. many more dollars than if you just rented there. And you didn't care that a correction is in the cards sometime, so long as your expenses continued to lower your taxable income. (But in Melbourne, the portion you live in is NOT tax deductible).
Also, I just don't reckon you can use the last 17 years in NY as an analogy for Phoenix AZ, ahead.
And as far as I can see, @Account Closed is nowhere near breaking even. Even if she doesn't live there!
Aren't I right by saying that $1,700/m only covers her PITI? What about ALL the other expenses?...
@Brent Coombs The PITI +mtg ins comes to $1400. The rents are NOW totaling $1400($650 front unit and $750 Back). The tenants are also paying for their water bill... @Ryan SwanAlthough there is the human aspect to consider. Knowing that the long standing tenants are families does make me rethink raising rents. If I don't raise rents to market then the numbers will not work after expenses. I would be making a lot of hard decisions considering this is my first deal...
What I was trying to say is that @Account Closed should not take into account JUST whether or not she is making a Cash Flow.
Phoenix is not my city of expertise. It should be hers and she should buy after she does her homework on the future economics in her location.
It's actually more wise for EVERYONE, not just Sarah, to do their homework about Future Economics.
Take someone who bought in Detroit 17 years ago. If they did their homework with the Domestic Automobile Market, they would have known to STAY AWAY. At least by the time the Big 3 Car Manufactures proved themselves to be completely non-competitive against foreign Auto Manufactures, you needed to RUN away.
The question that should come to mind for anyone that is buying in ANY CITY should be "Is my City like NY and SF or is it like Detroit?"
To NOT ask that questions and actually try to answer it for the next 10 to 15 years is really Investing blindly.
There is a saying that I like, "If you can Predict it, you can profit from it." That should imply that if you CANNOT predict it, you really haven't thought about whether or not you may have a lemon on your hands in 10 years from now or if you have a diamond.
When I invest in Stocks, I don't buy IBM because of the Current Dividends. I buy it because of the future of their business and the economics which drives it. That translates to more free cash flow and higher Enterprise Value and that Translates higher dividends and then to a higher stock price.
Anyway, I'm beating this to death. Do your home work and say to yourself, is this NY (or SF) or is it Detroit or somewhere in between? At least find out before you buy!
@Brent Coombs The PITI +mtg ins comes to $1400. The rents are NOW totaling $1400($650 front unit and $750 Back). The tenants are also paying for their water bill... @Ryan SwanAlthough there is the human aspect to consider. Knowing that the long standing tenants are families does make me rethink raising rents. If I don't raise rents to market then the numbers will not work after expenses. I would be making a lot of hard decisions considering this is my first deal...
Are you SURE $1,400/m includes both PITI AND mtg ins? Are you saying if you didn't need to pay mtg ins, you'd only be up for around $1,200/m PITI? Can you please double check those figures, and let us know how you arrived at them?
Usmortgagecalulator.org says you'd need to have a 2.5% Interest Rate (for 30 years) to only be paying $1,400/m.
My guess is, the interest Rate you'd be paying will be significantly higher than 2.5%. But do you know what it'll be?
Hi @Brent Coombs and @Account Closed
I checked the Math myself. Here is the spreadsheet:
Using Sarah's numbers in her beginning post, she is Buying for $235k and puts down $8k, borrowing $227k as her Principal Balance. The LTV is at 97%. I am calculating using a .75% MIP as a Guess, could be higher, but she can look it up.
Given those numbers, using an Excel Spreadsheet, I assumed an Interest Rate of 4.5% for a 30 year fixed Loan. The P&I Payment is $1,150. Her MIP will be $142 and the total of P&I plus MIP is $1,292.
If she is getting $1,400... then the difference which is $108, pays for her monthly Taxes and Insurance.
Really, I personally love doing the Math myself and don't trust others, even the Mortgage Calculators to do it for me. It just hides too much of the details.
I exposed the Formula for you so you can duplicate the above screenshot.
Sarah's calculation of total carrying costs of $1,700 seems correct. When we subtract $1,292 from $1,700... we get $408. She needs to cover her monthly Taxes and Insurance and all other building expenses with that.
However, I'm not sure it will carry her Water and Sewage, Common Electrical, and Maintenance costs. But she seems to have a handle on the calculations.
Hi David.
Because I take into account at least 4 ways of making money in Real Estate: Cash Flow, Appreciation, Mortgage Balance Reduction and Tax Savings, it doesn't matter to me, personally, as long as the total NET increase of all the ways meet my criteria over a 10 year period of time.
In the case of a slightly negative cash flowing property, there MUST be a predictable future cash flow reason why I should buy it.
There in fact IS a very PREDICTABLE Cash Flow..... even better than the Rents minus Expenses.
That Cash flow is the Amortized Mortgage.
It looks like this:
If you look at a Amortized Chart that I put together myself, you will note I included how the Mortgage gets paid off. You will notice that in Column G, I showed the reduction of the Mortgage Balance on a per month basis. Column H shows the Total Reduction from the initial amount of $984,200.... and Column I shows the AVERAGE Balance reduction as the loan gets paid off. This Average is calculated as taking the total Reduction divided by the number of months already paid.
This is ALL Mathematics. Even more, this is ENTIRELY PREDICTABLE and you cannot even vary from it. This WILL HAPPEN.
Once you know this for sure, it IS Real that the monthly mortgage reduction is YOURS and builds your Equity and net worth.
I also picked $984,200 for a reason. It's not Random. That's the max Loan you can take out for a conforming loan for a 3 Family property.
SO.... if you were buying a 3 Family in Brooklyn and were negative $200 per month or so, the mortgage reduction of the very first payment is $1,418. That means that if you added back in the fact that you gained $1,418 in equity from the Mortgage reduction, you are $1,418 minus $200 negative cash flow = $1,218 ahead in Net Worth or Equity.
By year 10 (or 120 months), you are building equity at around $1,750 per month. That's why I split the screen there. Remember, you need to be able to predict what's going to happen 10 years from now.
Anyway, I can take these into calculation and buy because a Negative Cash Flow Investment that NETs out better by adding Mortgage Reduction, Appreciation and Tax Savings can make me very rich, and it has already.
However, and I will say it again and AGAIN....... I am not preaching to buy on Appreciation... or Mortgage Reduction... OR Cash Flow...... buy the way you want.... but I am Preaching to learn ALL the methods of making money on Real Estate. Then it's up to you to decide if you want to buy it.
When you only know 1 Calculation... which is normally Cash Flow...... you are limited and completely biased to buy only one way.
Hope that answered the question.
Hi David.
There are 2 ways that I am going to answer your questions. Both ways are needed.
First, we must review the Math of purchasing Properties.
Let's say you can buy a property sells for $100k and will return 100% ROI in 4 years. It's a really WONDERFUL DEAL!!! The best you can find anywhere because it's pretty much guaranteed!
Well.... unfortunately, you don't have $100k, you only have $50k. BUT...... luckily, you have a brother that has $50k as well!
BUT...... it will make a 100% ROI deal be split among 2 people...... which means 50% for you and 50% for your brother.
WAIT......... is that really right?
Let's see.
Since the property sells for $100k, you put in $50k, your brother puts in $50k for the total of $100k.
4 years later, you sell the building for $200k which is a 100% return.
You then split the proceeds to both you and your brother which is $100k each!
Now, let's look at the actual ROI.
You put in $50k, you get back $100k. Your brother did exactly the same.
So you both made 100%!!!! WONDERFUL!
The lesson here is that no matter what you put into an Investment, every partner gets the SAME ROI!!!! This is why the Stock Market runs the way it does.
The important thing isn't the PRICE of the investment. The reason is because all you need to Calculate is the ROI of the TOTAL Investment and every partner will receive the same!
No need to limit your target investments. In fact,this is how Syndication work as well.
Find the BEST ROI Investment.... then determine if you need partners. Then GET your partners and EVERYONE gets the SAME RETURN! WONDERFUL!
Next, in response to your question on Negative Cash Flow and tying up a lot of Capital, again, Partners help.
You split out the negative cash flow by percentage ownership.
You limit your capital to what you want to lay out, again calculated by ownership %.
In fact, this is a great way to do things because you also distribute the risk of the investment to everyone equally.
I know a lot of people are thinking, "What?! holy cow... not only do I have to learn how to buy a property, but I have to learn how to buy one with Partners? That's way too much for me to handle!!"
BUT....... what if the partner is skilled and knowledgeable? What if the Partner has a vast amount of experience?
The problem isn't really about Price, Negative Cash flow or even Capital.
It's about Networking Skills. This is the number one factor in your ability to increase your chances of being successful.
The problem I find everywhere is the lack of Networking to find great partners. That only leads to trying to do everything yourself.
There seems to be a paranoia and skepticism to Partnering. Yet, this can take you beyond where anyone is by themselves.
You need people, absolutely. You may need a Realtor, a Lender, a Wholesaler, a Mentor.
But to increase your game even more significantly, you need Partners. That will open the doors to EVERY CITY, EVERY ASSET. If not, you limit yourself to the single Quadrant...... yourself.
Picking your Partners is a skill that needs to be learned.
The most important Characteristics of a Partner is his honesty and integrity.
Even the Banks check that out by doing a Credit Score and looking at all your Assets and Employment History.
You can do the same and more. When you go to meet and discuss possibly partnering up, have the Partner do not only a Credit Check, but a Criminal Background also.
What I also do is ask groups to bring their partners. Then I educate them so that everyone knows the Math and the economics needed to be successful. That way, if one partner is too busy, another can pick up the slack.
If you can do this, then you solved all of your problems.
@Account Closed if you can't move out, rent it to someone else and be positive cash flow you're paying too much.
@David Lichtenstadter Yes I agree - I am lacking some of the capital required to do some work that the seller is not willing to do. Their reasoning for not completing some of the repairs(window missing - only has a covering, and a carport support column was obviously hit by the tenant)was that the price was $17,000 below market value, yet this doesn't seem to be the case looking at comps.
After looking at the option of keeping rents as is, there was a negative cash flow each month after bumping up my rehab budget to accommodate for additional repairs. For this reason, I decided not to buy the property. Its too bad that in Phoenix many of the current landlords require a accepted contract, in this case it seems to waste more time and effort than anything else.
if your going be living rent free with their rents couldnt use your hacking money every month to pay for repairs richard
@Ivan Barratt, what do you mean by "if you can't move out, rent it to someone else and be positive cash flow you're paying too much"?
(By the way, even if she does move out after her mandatory year, I still reckon this one won't be cash-flow positive).