Analyzing Properties For A Multi-Family House Hack

[Mark Francour]

I am new to the Tampa area and looking to buy a small multi-family property to house hack this summer. I have begun analyzing properties in the Tampa, Clearwater, St. Pete area.

Being new to real estate and analyzing properties I feel like I am still "winging it." What advice would you give to someone that is starting their process of looking at properties? Would you use the BP Rental property Calculator, or create your own Excel Spreadsheet with formulas? Are there any specific expenses that are abnormally high or unique to the area?

Obviously, the current state of the market it has been tough to find many deals in the area. Is there cities/areas nearby that you would suggest to look at for properties? Areas that you see potential growth as the Tampa market expands?

Thank you!

[Derek Brickley]

Quote from @Mark Francour:

I am new to the Tampa area and looking to buy a small multi-family property to house hack this summer. I have begun analyzing properties in the Tampa, Clearwater, St. Pete area.

Being new to real estate and analyzing properties I feel like I am still "winging it." What advice would you give to someone that is starting their process of looking at properties? Would you use the BP Rental property Calculator, or create your own Excel Spreadsheet with formulas? Are there any specific expenses that are abnormally high or unique to the area?

Obviously, the current state of the market it has been tough to find many deals in the area. Is there cities/areas nearby that you would suggest to look at for properties? Areas that you see potential growth as the Tampa market expands?

Thank you!

I think the best thing you can do as a newer investor is use Biggerpockets calculators!  If you feel unsure, creating your own formulas in excel will only complicate things.   Find an investor friendly agent and lender that can help walk you through the process! Personal recommendation is Chris Mudloff for financing.

[Ryan Thomson]

@Mark Francour I'm curious what you are considering a "deal". Don't wait forever to find something that is improbable in this market. 

I wonder if your criteria may be a little unrealistic for the current market.

House hacking is tough to cashflow in year one (with current house price run-ups and interest rates) for a couple of reasons:

1. You are living in one of the rentable units

2. You are only putting 5% down so your loan amount is much larger and therefore your mortgage payment.

I would consider your net worth ROI. What I mean by this is considering how much your down payment returns to your net worth (appreciation, loan paydown, tax benefits, AND rent avoidance). Don't forget to include rent avoidance in your numbers! You have to live somewhere.

You may need to lower your return or cashflow expectations so you can get into a house hack that will allow you to avoid throwing rent money away every month. You know this, but don't forget all the other ways real estate makes you money. Paying down your mortgage and owning an asset that will appreciate over the long term.

Also, whenever running ROI calculations you have to consider the alternative. In this case it is "throwing your money away on rent every month". What's your ROI on that? It is very negative. When you consider all of these things and start with the assumption that you need a place to live, House Hacking often comes out as a clear winner even if your "cash flow" is actually negative but you are paying less towards a mortgage than what you would be paying towards rent.

[Simon Ashbaugh]

Quote from @Mark Francour:

I am new to the Tampa area and looking to buy a small multi-family property to house hack this summer. I have begun analyzing properties in the Tampa, Clearwater, St. Pete area.

Being new to real estate and analyzing properties I feel like I am still "winging it." What advice would you give to someone that is starting their process of looking at properties? Would you use the BP Rental property Calculator, or create your own Excel Spreadsheet with formulas? Are there any specific expenses that are abnormally high or unique to the area?

Obviously, the current state of the market it has been tough to find many deals in the area. Is there cities/areas nearby that you would suggest to look at for properties? Areas that you see potential growth as the Tampa market expands?

Thank you!

 I really like the BP rental calculator, I wouldnt invest the time into an excel sheet unless 

A) you get a template from someone

B) youre buying properties on a large scale and run in to a lot of special instance adjustments and need the customization to run abnormal numbers

My bottom line for house hacks is as long as you're paying substantially less than you otherwise would in rent AND It will cashflow when you move out of it then you should be good. A good house hack rule is to run numbers as if you weren't going to live there. If it cashflows without you occupying then you're golden.

[Chris Davidson]

Quote from @Mark Francour:

I am new to the Tampa area and looking to buy a small multi-family property to house hack this summer. I have begun analyzing properties in the Tampa, Clearwater, St. Pete area.

Being new to real estate and analyzing properties I feel like I am still "winging it." What advice would you give to someone that is starting their process of looking at properties? Would you use the BP Rental property Calculator, or create your own Excel Spreadsheet with formulas? Are there any specific expenses that are abnormally high or unique to the area?

Obviously, the current state of the market it has been tough to find many deals in the area. Is there cities/areas nearby that you would suggest to look at for properties? Areas that you see potential growth as the Tampa market expands?

Thank you!

 If you have been using a Calculator to help with the deal analysis after you get the hang of it and that you aren't forgetting anything  I would recommend making a abbreviated excel sheet to run numbers even quicker, and help you understand what the numbers are actually doing.

If you don't know how rates, rents, taxes, and etc.. are actually impacting the deal it will feel like winging it. Just look at more properties and don't worry about finding a good deal focus on really understanding the numbers. 

Finally if you can get a local investor who has been operating the style properties you are looking at see if they can share their numbers to give you a better idea on the actual cost of insurance, repairs, vacancy, etc...

Keep after it!

[Marcus Auerbach]

My team and I work with a lot of house hackers in Milwaukee, but I guess some general advice should translate:

1.) Buy a larger property. Rent is a function of size, long term ownership expenses are driven by # of kitchens and bathrooms. Bedrooms and living rooms cost little to own, but they generate the income. (I made that mistake of opting for smaller on my first one 15 years ago)

2.) The worst house hack in town still beats buying a single family home every time. So analyzing cash flow is not the most important metric.

3.) Buy in the best quality neighborhood you can comfortably afford at this point. You will never regret that.

4.) Focus more on understanding the value than the price. Most of your competition does not understand value, so they focus on price (cheap deals) and drive them up.

5.) Include the next 10 years of major expenses in your consideration. Roof, windows, HVAC, plumbing, driveway - anything that's already new, is big money you won't have to spend.

6.) Find an agent who understands these things, preferably has either house hacked or is investing in small MF or SF. And does at least 20 deals per year, over 30 is better. Best place is here on BP. You may have to interview several to find a good one, but it's very much worth your time!

[Noah Bacon]

Hi Mark! Welcome to BiggerPockets and thanks for joining!

Here are some tips for networking and making the most of your account.

1) I'd fill out your profile fully before you do anything else! As that will at least help folks that you reach out to know that you are a real person, with a picture and professional bio. Particularly be sure to include your goals for real estate investing so that folks can help you.

2) Go to the Search bar, and look for some local members in your area! Reach out to a few of the folks, perhaps those with hundreds or thousands of posts in this forum, and connect. You can do that here.

3) Check out some of the local meetups that you can find in this forum! There are so many so be sure to filter by your location.

4) Review this comprehensive 64 page deck on the state of the 2023 housing market (in your resource page as a member of BiggerPockets!) for real estate investors put together by Dave Meyer and available for all BiggerPockets members.

5) Consider meeting with a few agents in your area even if you are just getting started! An investor friendly agent can do all sorts of helpful things, like setting you up with a search for properties or connecting you with folks who have recently done deals like the ones you want to do.

6) Consider analyzing a deal or two in your local market, just for practice, with a free use of our Rental Property Calculator (or other calculators).

Hope this helps! Please reach out with any questions you may have!

[Carlos Ptriawan]

Quote from @Mark Francour:

I am new to the Tampa area and looking to buy a small multi-family property to house hack this summer. I have begun analyzing properties in the Tampa, Clearwater, St. Pete area.

Being new to real estate and analyzing properties I feel like I am still "winging it." What advice would you give to someone that is starting their process of looking at properties? Would you use the BP Rental property Calculator, or create your own Excel Spreadsheet with formulas? Are there any specific expenses that are abnormally high or unique to the area?

Obviously, the current state of the market it has been tough to find many deals in the area. Is there cities/areas nearby that you would suggest to look at for properties? Areas that you see potential growth as the Tampa market expands?

Thank you!

 For househack, you need to visit lot of open house in different neighborhood. Why ? bcause some neighborhood are built for multi generanational living, while some houses are built for small family living. What you should do :

1. Find house/neighborhood where the house has lot of acres
2. Find house/neighborhood where houses were built from the 1950s
3. Find house that has multiple floors with multiple entries
4. Find house that perhaps has ADU/converted garage or structured to have multiple units in single property.

It takes lot of research to do this, but yes, go visit as many as open house possible and you would find "idea". The cost of adding bathroom for example, could be started from as low as 15k, in case needed.

[Nazanin Boojar]

Quote from @Mark Francour:

I am new to the Tampa area and looking to buy a small multi-family property to house hack this summer. I have begun analyzing properties in the Tampa, Clearwater, St. Pete area.

Being new to real estate and analyzing properties I feel like I am still "winging it." What advice would you give to someone that is starting their process of looking at properties? Would you use the BP Rental property Calculator, or create your own Excel Spreadsheet with formulas? Are there any specific expenses that are abnormally high or unique to the area?

Obviously, the current state of the market it has been tough to find many deals in the area. Is there cities/areas nearby that you would suggest to look at for properties? Areas that you see potential growth as the Tampa market expands?

Thank you!

The market looks like a growing one. You should definitely look out for homeowner insurance in that area as it may go really high in some parts.

I don't know much about the potential of multi-family properties there but as far as I have analyzed SFHs, Yulee has the greatest potential with up to ~16% cap rate. I guess the rule applies to both types of homes though.

I can share with you my analyses of SFHs in Florida.

[Matthew Masoud]

Especially at the beginning, I like getting a second look at my deals, just so I have the confidence to pull the trigger. After your 2nd or 3rd deal, you'll know what's a good deal or a bad one.

If you need someone to run the numbers on your deal that's actually a service we offer.