All Forum Posts by: Andrew Dean

Hey @Cody Tanner, House Hacking is the way to go.  You should hack another house soon.  My wife and I are really into multi-family properties.  Also, there are some really favorable loans out there for investors.  PM me and we can chat about them.

@David K.

Thanks David!  I have an awesome realtor! (wife) :-)

@Rick Santasiere

Thanks Rick!  Really appreciate that!  Hopefully I can write some more success stories on here :-) 

@Matthew A.

It's not as bad as you think! 

Also, this is a pretty arid, desert climate, there are no floods out here!  Thank goodness!  

@Matthew A.

Some are students (who we have co-sign with their parents) and some aren't.  It's a 4 bed, 3 bath.  The master bedroom is leased out as a shared room to 2 people.  Each pay $300, so we get $600 out of the master bedroom.  That same bathroom is shared with another private room as well.  

@Alexander Lang

Thanks man!  For sure, check it out. Like I said, everything's great about it, minus the fact that it takes 5-6 days for it to clear into your account, but meh it's free.

@John Chapman

Thanks! We're pretty pumped about it, but because of the nature of the property, we lowered the CapEx, which could be higher.

@Matthew A.

Here is a breakdown of each room:

2 Private Room/Private Bath: $400 each

1 Private Room/Shared Bath: $350

1 Shared Room/Shared Bath (Master Bedroom): $300 each

$25/garage spot

Total: $1800/side

The duplex sits nicely between two universities (UVU and BYU) that have over 35,000 students each.

Also, if you do a cost segregation analysis you can depreciate the property at an accelerated rate and shelter all the income, so none of this "pre-tax" nonsense.  You would want to do a 1031 exchange after about year 7 or 8 though as the tax benefits fall off after that. 

@Tina Ferrier

Sorry I missed your comment!  The requirement is to live there for 12 months, unless there is a life change or a reason that is good enough for lenders.  IE - you need an extra bedroom for a new baby or you get a new job, or your wife goes back to school, etc.  

@John Chapman @Matthew A. Well we will just have to agree to disagree on my numbers!

@Mike Carino

I chose a portfolio loan because a conventional loan requires 25% down for a multi-family property, unless you get an FHA loan. I didn't want to use FHA though, as I wanted to save that for later. A portfolio loan also doesn't require PMI, whereas an FHA loan requires PMI through the lifetime of the FHA loan (you can refinance into conventional later on though and PMI falls off). I didn't put the property in an LLC though, which is something I should have done, and will do. I commute to work right now, which takes me about an hour each way, so I want to be closer. Also, my wife will be going back to finish her degree and we wanted to move closer. Owner occupied loans require you to have the intent of staying at least 1 year, which we did.  Let me know if you have any more questions!

@Matthew A.

Breaking even?!? hahaha Ok let me give you a little more detail bro.  I can see you're a numbers guy,  so either you're an engineer or an account:

First off, I purchased the duplex for $280,000, not $260,000.  I put 10% down so my mortgage started at $252,000.  

Obviously I'm not adding in a monthly HELOC payment because I haven't used it.

Provo, UT has a 1.5% vacancy rate, so I don't even factor that in, as we've never had issues filling vacancies.

The property doesn't have a lawn as it's asphalted completely and has 12 parking spots. The tenants pay for ALL utilities.  

Portfolio Loans don't have PMI.

I manage the property myself, so no property manager.

$1500 PITI and I allocate $100/month towards CapEx.

I guess I should factor in the snow shovel I left them? $16?

I do have $5000 in reserves that I use for unforeseen repairs, but haven't had to dip into that yet.  I have a PLOC as well from a bank that I can use for repairs on my 4 properties, but haven't had to use that yet either.  

For my 4 properties, we cash flow about $3000/month that goes into a pot that we just grow and grow and use to buy other properties.  

10% CAPEX, in our experience, is a bit much and frankly unnecessary. I could be wrong, but that's been my experience. It also depends on the property type. We have a condo we own as well that we cash flow $350/month. We've owned it for over 3 years and rent it out to singles and haven't done a single thing other than changing filters. It also has it's own $5000 reserve since the beginning, which I recommend having for any property.

This particular property has all brand new appliances with 5-year warranties. It doesn't need landscaping. I find $100/month works fine for my CapEx.