Qualified for 400k. should i buy 4 family?

Question

With my 400k qualification. Should i fha a four family and live in one unit?  Im looking in the Austin texas market right now and need to find a good deal.

What should i expect to make roughly? will i live rent free if its a good deal?

Kris Wong · Answer

You'll have a hard time finding a decent quad for $400K. Anything you find below $400, you probably won't want to live in. I'd focus on a nice duplex. You will not live for free. Most duplexes listed here barely cover costs with both units rented, if they even cover all costs. Obviously, the further you go from the city, the less you'll pay. I've been recommending Franklin Park for this kind of deal recently, though prices in that area has been increasing as well.

Jordan Moorhead · Answer

Hey Account Closed

I'd just look for a deal that meets your criteria and not worry so much how many units it has. 2-4 is what you're most likely looking for.

As for living for free, it depends. If it makes enough gross rent with you occupying a unit then you could!

Jim Robertson · Answer

Hello Jeff,

In the Austin area 400k would be tough to find a fourplex that doesnt need substantial work. There are quite a few duplexes that come and go between 300k and 400k. Usually when I run the numbers, I can't quite find a live for free situation, but you can greatly subsidize your cost. Try to look for the 1% rule (the gross monthly rent will be 1% of the purchase price). You can also learn how to calculate cap rates and cash on cash return to further evaluate a deal.

Account Closed · Answer

im open to going a little outside of austin. Im mainly just trying to find something that will cover the cost of me having to rent. If im able to live rent free thats what im going over

Fernand Foronda Tolentino · Answer

You working with a Realtor? That sounds like a super tall order in Austin. Going further out, might be possible? I've been looking around Austin a lot.

Account Closed · Answer

Hey Jeff,

I'm in agreement with Jordan that finding a project that fits your numbers should take priority over the number of doors you have. You would be hard pressed to find a quadplex near downtown Austin that is move-in-ready for $400k. Like Kris said, the further you move away downtown, the more feasible that project is. Are you looking to put some work into the property or for units that are ready to go? In terms of a duplexes, I have sold a few near downtown that my investors were all-in for under $300k. So that might be a better route for your numbers before working up to a quad.

Qualified for 400k. should i buy 4 family?

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