I was wondering if you could help answer this question...or guide me to a forum that can help me....as I cannot find it on your website.
I am planning on buying a Multifamily 2 unit house as an investment. One floor will be mine, and the other will be rented out. I'm hoping to get it to a CASH FLOW Positive, but HOW do I get those numbers / what to look out for in the Bigger pockets Calculators?
Will it be under Rentals?
Under the BRRR Strategy?
Any and all help is greatly appreciated!
@Duncan Forbes I would say this forum is more for commercial multifamily properties but calculating the cash flow is quite simple for a duplex. Revenue minus expenses minus your debt service. A quick youtube search would help you. Good luck!
@Duncan Forbes . Are you looking to put down a certain percentage and finance the rest, or are you looking to buy it all cash, fix it up, rent it and put a mortgage on it? If it is number one, use the rental property calculator, if it is number two, use the BRRR calculator.
Make sure you have the proper assumptions for rents and all expenses and reserves, so you have the proper inputs for the calculators.
If you also want to know the COC%, do what Justing says - if it is for one month, multiply it by 12 (for the annual figure), and divide it by the total amount of money it took to purchase and renovate.
I really do appreciate both of you helping me out! Thank you so much!
@Duncan Forbes , as Rick mentions, there are many factors that go into this. The biggest one is your mortgage size. Generally, if you are buying with an FHA loan at 3.5% down, you will not have positive cash flow while living in one unit. Then again, even at 20% down in a lot of markets, it will be challenging to cash flow while living in one unit. You are essentially forcing the property to sit 50% vacant (since you are not paying rent).
As Justin mentioned to calculate cash flow, take the rent from your tenant, less Principal, interest, taxes and insurance from mortgage, less maintenance and any utilities you pay for your tenant and you will get your cash flow.
You guys gave GREAT feedback. I should of probably clarified exactly what I am looking for.
So I am planning on using the BRRRR Strategy.
Taxes - Check
Purchase Price - Check
After Repair Value - Working on it...i know this is tough. But Bigger pockets says get Comps from an Agent (I got 3) and then compare my (For example, my Multfiamily house [2B/2B]) property to other 2b/2b and look for what has SOLD. From there...I slightly get lost...If I imagine putting in an extra 20k into redoing work, should I ADD 20k to what a house sells for + Repair values?
Purchase Cost - Check (Usually 1-2% Biggerpockets says, so I put in 2%)
Estimated Repair Cost - So I figured Maximum of 20k
Downpayment - 10% (Getting pre approved for a mortgage right now as we speak).
Loan Fees and the rest of the boxes - Check
Amortization - 30 years
Refinance - After 6 months (Banks don't let you refinance until after 6 months?)
Estimated Rehab Time - 3 Months
Refinance Loan Details - I saw on bigger pockets that banks usually refinance up to 70% of the ARV Value AFTER all the work has been done?
Rest of the boxes on the BRR calculator - Check
Now here is my main Question. MONTHLY INCOME. Since I will be living in ONE unit, but renting out the other unit, Should I put the INCOME of one Unit as ZERO since I am living in that unit? And the other INCOME as whatever RENTOMETER says in that area for a 1b/1b?
That's really just what I wanted to know. Thank you for taking the time to read all of this!!! I hope I can repay back somehow!