Am I Being a Diva? (deal sourcing with agent & loan officer)

[Keith Mikkelson]

First time buyer here - looking to figure out if my expectations are realistic. I'm looking to house hack a single-family or duplex, occupy for 1 year per FHA loan rule, and ideally exit after year 1 with a cash-flowing property.

In my mind, before I consider anything else, I want to know what the total monthly payment would be all-in, and the expected rents to be received from the unit(s). My loan officer tells me payment calcs should be left to him due to rate fluctuations and nuances in taxes across different locations.

Is it too much to ask my loan officer and real estate agent to provide an estimated payment and rent amounts up front? Since cashflow is the ONLY must-have on my list, it doesn't make any sense to me that we'd run around town looking at properties without having an understanding on these two fundamental numbers, but it seems my agent wants to do exactly that. Is this something I can expect my agent and loan officer to do for me? Or am I way off base here?

[Matt Devincenzo]

You're way off, this is something you need to be doing for yourself. Now the lender should be doing the calc' on payment etc since it does vary and depend on specific scenarios etc. Be they should give you an idea of where you're at based on generally what you have for a DP, income and price point you're looking to buy...maybe one scenario for SFR and another for duplex. For instance $40K down on an $800K purchase rate would be XX% payment ~$X,XXX/mo.

Your agent may provide some help with rents, but ultimately this really comes down to your intentions re: upgrades or improvements to rent at a certain rate. So you take those pieces of data and properties you're interested in, and calculate if something works for you. If it does then you make an offer, and your final numbers from the loan officer should be fairly close to your calculation.

[Eliott Elias]

No it's not. In fact, they need to. Your lender should send you a good faith estimate on what your PITI will look like before you close the loan. Your realtor should send you comparables of what like property around you is renting for.

[Michael Ohren]

Quote from @Keith Mikkelson:

First time buyer here - looking to figure out if my expectations are realistic. I'm looking to house hack a single-family or duplex, occupy for 1 year per FHA loan rule, and ideally exit after year 1 with a cash-flowing property.

In my mind, before I consider anything else, I want to know what the total monthly payment would be all-in, and the expected rents to be received from the unit(s). My loan officer tells me payment calcs should be left to him due to rate fluctuations and nuances in taxes across different locations.

Is it too much to ask my loan officer and real estate agent to provide an estimated payment and rent amounts up front? Since cashflow is the ONLY must-have on my list, it doesn't make any sense to me that we'd run around town looking at properties without having an understanding on these two fundamental numbers, but it seems my agent wants to do exactly that. Is this something I can expect my agent and loan officer to do for me? Or am I way off base here?

I think your expectations are rather high.  But I'm no expert, I'm 5 properties in.  I do all my leg work and math.  That could be because I don't trust other people. 

[Jay Hinrichs]

Quote from @Matt Devincenzo:

You're way off, this is something you need to be doing for yourself. Now the lender should be doing the calc' on payment etc since it does vary and depend on specific scenarios etc. Be they should give you an idea of where you're at based on generally what you have for a DP, income and price point you're looking to buy...maybe one scenario for SFR and another for duplex. For instance $40K down on an $800K purchase rate would be XX% payment ~$X,XXX/mo.

Your agent may provide some help with rents, but ultimately this really comes down to your intentions re: upgrades or improvements to rent at a certain rate. So you take those pieces of data and properties you're interested in, and calculate if something works for you. If it does then you make an offer, and your final numbers from the loan officer should be fairly close to your calculation.

agreed while the lender and agent can give you general feel.. You as the buyer should be able to figure out what your payment is going to be and rents dont vary that month.. this is very basic stuff and it will help U eliminate things quickly when you can do those two things yourself..

PS using FHA minimum down in today's market and expecting positive cash flow in one year is going to be tough right there unless you do some pretty significant value add.

[Jeremy H.]

Quote from @Keith Mikkelson:

First time buyer here - looking to figure out if my expectations are realistic. I'm looking to house hack a single-family or duplex, occupy for 1 year per FHA loan rule, and ideally exit after year 1 with a cash-flowing property.

In my mind, before I consider anything else, I want to know what the total monthly payment would be all-in, and the expected rents to be received from the unit(s). My loan officer tells me payment calcs should be left to him due to rate fluctuations and nuances in taxes across different locations.

Is it too much to ask my loan officer and real estate agent to provide an estimated payment and rent amounts up front? Since cashflow is the ONLY must-have on my list, it doesn't make any sense to me that we'd run around town looking at properties without having an understanding on these two fundamental numbers, but it seems my agent wants to do exactly that. Is this something I can expect my agent and loan officer to do for me? Or am I way off base here?

 Couple of things to dissect here:

First - your strategy is ok. Why do you want to do an FHA loan? You can probably do 3% down with a conventional loan. I owned 4 rentals before I bought my primary residence and I put 3% down. With an FHA you will pay PMI for the life of the loan if you put down less than 10%.

Secondly - all you need from your lender is the rate. You know it's a 30 year fixed. You can get the tax assessment from the assessors website and you can get a homeowners insurance estimate as well. Homeowners for me generally falls around $150-200/month depending on the size/cost. So from there you can easily calculate your PITI. That's all you need to do.

If you are wondering about rents your best bet is to contact a property manager, let them know you are in the market and see what they think it would rent for. Then run your numbers conservatively...You're realtor MAY have an estimated rent but that really depends on the realtor. Some are great, most aren't. So I'd take what they say with a grain of salt. 

It is up to YOU to do YOUR due diligence. This is your responsibility - it's your property, business and income, right? Therefore it's your numbers. Your job is to gather as much information as you can then make your best educated decision on the property being viable as a rental/flip etc. 

[Carlos Ptriawan]

Quote from @Keith Mikkelson:

First time buyer here - looking to figure out if my expectations are realistic. I'm looking to house hack a single-family or duplex, occupy for 1 year per FHA loan rule, and ideally exit after year 1 with a cash-flowing property.

In my mind, before I consider anything else, I want to know what the total monthly payment would be all-in, and the expected rents to be received from the unit(s). My loan officer tells me payment calcs should be left to him due to rate fluctuations and nuances in taxes across different locations.

Is it too much to ask my loan officer and real estate agent to provide an estimated payment and rent amounts up front? Since cashflow is the ONLY must-have on my list, it doesn't make any sense to me that we'd run around town looking at properties without having an understanding on these two fundamental numbers, but it seems my agent wants to do exactly that. Is this something I can expect my agent and loan officer to do for me? Or am I way off base here?

 the way I see it , you're lousy investor as you dont even want to do basic DD. If I'm the private lender, I would not lend my money to you LOL
It seems you want someone else to care more for your investment rather than yourself.

[Account Closed]

It's fair to expect them to do those calculations, but you should always be doing them yourself on top of that. 

[Ryan Thomson]

@Keith Mikkelson You should absolutley be running your own numbers. Reach out for a spreadsheet I have. However, 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 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.

[Keith Mikkelson]

@Matt Devincenzo @Eliott Elias @Michael Ohren @Jay Hinrichs @Jeremy H. @Carlos Ptriawan @Account Closed

Thank you all for weighing in here - general consensus seems to be that while my loan officer could have probably been pitching in more, I shouldve been stepping up more myself.  That combo of efforts is yielding better results, and I'm glad I checked in with you guys.

[Ryan Thomson]

@Keith Mikkelson good word!