Updated over 5 years ago on . Most recent reply
Need Help On this Deal
Hello Everyone, I am currently looking to buy my first multi-family property and want to attempt house hacking. I am a freshman in college at Troy University and have found a property I feel is perfect to get started with but I have a few quick questions. A brief background about this property, It is 2 duplexes on one lot being sold as one piece of property. Currently, one unit is being rented and the landlord's niece is living for free in another unit. The thing that makes this property special is its location. This property is less than a quarter of a mile from the university and would be perfect student housing.
The asking price is $300,000. After a bit of research, I believe with $50,000 in renovation (luxury vinyl floors, new countertops, new paint, new siding) all these units could be rented out at least $550 a month, not including utilities. Each unit is individually metered so tenants pay all utilities. After asking the sellers agent I believe that Insurance per year would be around $3,000 per year and taxes would be around $1,500 per year. With a total of 8 bedrooms that would bring the gross scheduled income to $52,000 per year. The seller's agent also mentioned that this property was probably an 8 cap.
The questions I have are:
1. What should I pay for this thing. After running a few quick numbers I came up with a number around $225,000. However, I'm not completely confident in this number because I'm still just learning how to run the numbers.
2. How should I go about financing? My first thought is an FHA loan, however, I don't have a job and my credit history is in the infant stages.
Thanks for all the help!