4-Plex House Hack
Hello BP Community,
This is my first BP post, so please forgive me if I deviate from any community posting practices and standards. I have been renting in Jersey City for approx. three years, and have always had an interest in REI. I have been a member of BP for approx. 2 years, and an avid listener of the BP Podcast. However, I have found myself in a state of "analysis paralysis." It has occurred to me that the best means for me to get started is a House Hack for my first property to get my REI venture off the ground. Also, given my market, Multi-Families are in high supply, but finding a good deal as a beginner is hard to come by. I did come across the following deal:
Property: Victorian 4-Family (8 Bed, 4 Bath) (2Bed, 1 Bath per unit)
Ask: $850,000
Location: Weehawken, NJ
Rent: ~$2,000 per unit
Additional income: $1,000/year - coin laundry
Expenses:
- Mortgage/Taxes/PMI/Insurance: $5,397
*Note: I plan to do a 5% down FHA (possibly 203K depending on condition)
Utilities: $250
Vacancy: 7%
CapEx: 10%
Maintenance: 5%
After using the BP calculator - It appears that I will be paying ~$850 per month (assuming I purchase full ask). I realize that is a negative CF, but it significantly beats my $2,5000/mo. rental. And when it is time to leave, the 4th rental will bring it to a positive CF. I will be seeing the property tonight. From the curb, I do see some value add opportunities. I am also told that the owner is trying to get out of the property before being foreclosed on - Is that something I should be excited or concerned about?
Any insight you guys/gals have would be most helpful. Also, since I am going on my first showing tonight, do you have any suggestions for questions I should be asking?
Thanks for your help!
Best,
Derek