Out of state move & looking to purchase a 4 unit to house hack.

7 Replies

Hey BP community. My wife and I are about to go through a big move to another state (Marquette, Michigan). My wife will be attending Northern Michigan University this August. We currently live in Illinois, just west of Chicago, and have been here for the last 4 years. Our goal is to purchase a 2-4 unit property in Marquette in an attempt to house hack and save on expenses. I have not done any deals yet, but have wanted to for a while now and finally decided to start taking action. We purchased our first home in December of 2016, here in Illinois, for $171,000. Just a little over a year later it is worth roughly 200K. I used a VA loan to purchase our home and was shocked to see how much it has gone up in value in just over the year that we've been here. I have thought about renting out the house once we move, but the numbers aren't great so I will most likely sell.

I recently found a 4 unit property on Craigslist in Marquette for $315,000. It is fully rented and brings in $3,125 per month. I emailed the seller for information on the property. It is an older gentleman who has owned the property for 20 or 30 years. He is looking to retire and move south. I don't blame him as the winters in the UP are rough. The property is in great shape at least from the pictures. Zillow's zestimate on the property is around $260,000, so I think the price can be haggled down a bit. I ran some numbers through the BP calculator and if my wife and I lived in one of the 1B, 1B units at a purchase price of $290,000 we would cash flow $25 a month living rent free. From my analysis it seems like a pretty good deal. My goal would be to use a VA loan to purchase the property but we are still in our home and will probably not be leaving for Marquette till June-July. I hate to let something like this pass, and am really just looking for advice on what we should do! We do not have much savings at the moment as we have been putting money into updating our current home. Should I contact the seller and tell him thanks and wait for another opportunity down the road, or find a way to pursue this? The property is located 6 blocks from the college in the heart of downtown!

Thanks in advance for any and all advice.




I don't have all of the numbers, but I ran "average" numbers and I'm not sure this property would be a good investment. However, I would need more numbers. You have to take out all of your expenses, to calculate your return. How much rent would come in, if you don't pay anything? You also have to deduct: vacancy, insurance, taxes, management fee and maintenance. On the maintenance side, don't forget lawn care and snow removal in the winter. You may also have to deduct costs like: "Common electric bill", water bill and sewer bill. I don't know if your tenants pay their own water. But usually the landlord has to pay some type of water bill and at least pay for the electricity in the common areas. So be sure to factor in all of the costs associated with the property. Best of luck to you. One last thing.....Don't believe Zillow's estimates. They're all over the map! I would suggest you get some solid sold comps from a realtor and try to have them run in a 1/4 mile radius of the property. 

Seems like that would be hard to break even with that deal.  This is on the upper end of the price spectrum for Marquette too.  Most of the duplexes I see listed are in the 90-140 range. 

It's definitely on the high end. Figure in a water bill in the range of 250 per month. My 4 bedroom mqt duplex runs 200 a month. My 2 bedroom duplex runs 150. 

The city of mqt will not allow you to split a multi unit to separate meters.

I just pulled the Craigslist posting. The landlord pays the heat as well. You can call semco and ask them for an average bill. (I would guess 170 average monthly)

As far as a house hack. I don't see you doing any measurable value add on this property. It's in pretty good condition. 

House Hacking sounds good. Are you ready to be the resident manager? Are you qualified to screen the applicants? Should you consider the services of a property manager due to lack of experience? Probably!

@George Skidis , I am definitely ready! Tanks all or the advice and input!

Here is the link to my report that I calculated. I factored roughly $170 per month for heat, and $250 for water. The home has 3 one bedroom, one bath units, and 1 two bedrooms, 1 bath unit. The owner emailed me and said that the 1 bedroom units are currently rented at $700 per month and the 2 bedroom unit is rented at $950 per month. My wife and I would plan on living in one of the 1 bedroom units. I know that these rents may not be accurate and that I would need to contact a property manager in the area to know for sure, but per these figures, I am wondering if my report is accurate? I would manage the property manager my self, as well as take care of the snow removal and lawn care while living there. Although, I did factor in 10% for property management in my report. The purchase price for the house I put was for $285,000 which is $30,000 less than what the owner is asking. 

My report can be viewed by clicking the link below. Any input or advice is much appreciated!


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