All Forum Posts by: Benjamin Sulka

@Benjamin Sulka what does your buyer broker contract say? If the brokerage fee is owed to them if you buy any property, even without their assistance, then you owe that brokerage the full fee specified in your contract. We never signed an exclusive buyer broker agreement.

Lynn,

Thanks for your response.

I reviewed our agreement and it does not apply to this type of transaction.

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Quote from @Alan Asriants:

Here is another point: If you sell direct with me there are no agent commissions. Technically that should give you another 5% haircut.

You should not pay more for the property than what you can find on the market. Unless it is super nice or has an amenity others are missing

Alan,

That's a great point.

If I have a buyers agency agreement but this property is off-market, is this binding? I'm not asking for legal advice haha but rather an opinion. The realtor did not find this property and has done none of the negotiation.

All the best,
Ben

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Quote from @Nicholas L.:

@Benjamin Sulka

I think it's fine to present your analysis, but you can't "convince" anyone of anything. He either accepts or he doesn't. If he declines, you thank him for hearing you out, and you move on to the next one.

And on the loan, it's probably not assumable, and I don't recommend that new investors buy deals sub-to.

Do you have a lender lined up? And even if you're not working with an agent, do you have someone advising you?

Nick,

Thanks so much for the response. We do have a lender lined up and do have an agent.

I'm thinking about going straight through the title company because my agent did not find this property and did not do any of the seller negotiation.

Am I wrong in thinking this?

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Hey BP,

I found a property that was not on the MLS and was off-market FSBO.

I have a buyers agency agreement with a real estate agent in the county that this property is located.

Is it legal to do an off-market transaction straight through the title company without using the agent? Said agent did not find the property, has not spent time talking with the seller or negotiating, but is aware that I am interested in this property. This property is not on the MLS. I've been working with this agent for about a month and a half.

My preference is to go straight through the title company, put that money into renovations, and send the agent a couple hundred dollar gift card to Amazon for their time.

Would be incredibly grateful for any insight.

-Ben, aspiring multifamily house hacker

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Hey BP,

I found a FSBO property in my area that has potential to be a solid house hack deal.

Do you guys have any tips for negotiating with the seller?

The seller for this property is motivated because he never intended to be a landlord and wants to move to Florida.I want to try to get him to understand all of the expenses that I need to incur as an investor and that my offer price comes down to the number my spreadsheet shoots out basically.

The property is listed for $305,000 and he conceded an additional $15k down to $290k without me even saying anything. There is definitely potential to get it lower but it seems like it is going to have to be way lower after considering the expenses that are going to come with it.The entire property has potential to bring in $3,000 worth of rental income if my rent comps are correct. One unit is updated and the other would need to be updated while we are living in it.

I want to get him to understand if our monthly payment is too high, we don't have the extra cash lying around to fix up the other unit and get it to market rents. Which in turn makes the investment not viable.

He is looking for $290,000 but realistic offer price with the current interest rate and other expenses is closer to $260,000.

Should I ask if he has a loan on the property that is assumable? He bought it in 2021 so I bet it's low. I just have no clue how to navigate that.

Thanks for any insight!!!

-Ben

1 Vote

Hey BP,

New investor looking for my first deal. I found a really solid duplex opportunity to house hack but the property has existing leases through December of 2024.

I am looking to buy and move into a property in the next 2-3 months.

Is it possible for an owner to terminate one of his existing leases to allow a new owner to move into the property? Really trying to see if there is anything I could work out here.

I don't know what I don't know and would really love some insight on this.

Thanks so much!

-Ben, aspiring multifamily house hacker

1 Vote

Cleveland, Ohio

Ryan,

Welcome to BiggerPockets, man! I'm in the same boat looking to house hack this year.

If you're looking for a meetup, check out the events section here on BiggerPockets, or try Meetup.com or EventBrite.

This is how I've found all of the awesome events in my area.

Hope this helps!

-Ben

2 Votes

Fort Worth, Texas

Quote from @Anthony Swain:

Hey @Benjamin Sulka VERY soon to be house hacker,

MAN! I am rooting for you brotha. It sounds like you are very very close to your 1st deal. Personally, I am STOKED for you!

Anyway...

Here are my two cents. With these interest rates, if you can find a house hack situation that you are paying the same, slightly less, or I'd argue even slightly more, then I think it can be worth it for these reasons.

1) You will get to live in your preferred location. I think this gets down played, but getting to live in your desired location is a HUGE factor. Maybe you will have a closer commute to work, maybe you're closer to parks, favorite restaurants, interesting events, etc. The increase on your quality of life is hard to measure, but easy to feel.

2) As you mentioned, APPRECIATION will most likely be higher in more desirable areas. As a house hacker, you'll benefit from this, especially utilizing leverage with a low down payment. For example, if you buy a $200k house with 5% down (10k) and the house appreciates by 5% (10k), then you get 100% of that equity increase. Year over year this can really add to your net-worth & equity position.

3) If the property comes close to breaking even with you moving out, then it can still be a good deal. Interest rates will likely come down, so you can refinance to a better rate. On the other hand, if interest rates stay the same or go up, then you'll be happy you didn't wait around until they did.

Rents will likely go up over time as well.

You can also get creative to increase the income by doing MTR, STR, rent by the room, etc.

4) Loan amortization will increase your networth over the next 5, 10, 15 years+.

Keep at it Ben. So stoked to hear when you nail your first deal!

-Ant

Ant,

Really appreciate this response and it gives me confidence that my thought process isn't off.

Thanks for emphasizing some of those other benefits to my overall net worth as well as lifestyle considerations as well!

Looking forward to chatting with you on the phone, brother!

-Ben

1 Vote

Cleveland, Ohio

Quote from @Jake Andronico:

Quote from @Benjamin Sulka:

Hey BP house hackers,

Actively making offers on house hack deals in my area and want to get your thoughts on something.

Many of the properties in more desirable areas (and higher potential for appreciation) would allow me to pay just about the same that I am renting right now after considering every expense under the sun (PITI, vacancy, PM, capex, maintenance, etc etc). In my area, that number is $1,450.

These properties would be just about breakeven if we decided to move out after one year.

Considering all of the other benefits of doing that first deal, do you think it's worth it? Would have somewhere between $17-20k total into this deal.

Super grateful for any insight.

-Ben, aspiring multifamily house hacker

Congrats Ben!! That's awesome. Rooting for you.

If you can swing it and are willing to do what it takes to not lose the property if sh** hits the fan, then I would highly suggest purchasing in a more desirable area.

It's a long term game, and that's a better long term strategy.

Best of luck to you!

Jake,

Totally agree with you man. Definitely a better long term strategy.

More likely for rents to continue to increase, higher likelihood of appreciation, and better tenant base.

Great to hear from you. Appreciate all your contributions to the forums!

1 Vote

Cleveland, Ohio

Quote from @Drew McLoughlin:

Hey Ben I’m in the same boat, looking for my first 2-4 unit house hack (my number is closer to $2000 in the DFW market). For turnkey properties (given your $20k constraint) it may be difficult to break even on cash flow within 2-3 years. That’s what I’m seeing as well. Can’t control some of those variable (property taxes are killer here). Speaking for myself I’m just planning to have to live there for more than 1 year and make sure there is room to raise rents, for example spending a few thousand to bring a washer dryer connection to the complex if it doesn’t have one could be a great cash on cash return if you can raise rents maybe $50/unit on the next turn.

Drew,

Thanks for your response and definitely in the same boat on the property taxes piece...

Great call out on making sure there is room to raise rents! That is why I'm focusing on some of these "higher end" markets because rents are more likely to continue to increase and the tenant base is really solid.

We should connect sometime!

0 Votes

Cleveland, Ohio

All Forum Posts by: Benjamin Sulka

Benjamin Sulka has started 53 posts and replied 809 times.

Post: Buyers agency agreement - OFF MARKET property

Post: House Hacking FSBO: Negotiation process

Post: House Hacking FSBO: Negotiation process

Post: Buyers agency agreement - OFF MARKET property

Post: House Hacking FSBO: Negotiation process

Post: Can a landlord terminate a year lease? (to allow a house hacker to move in)

Post: New to Real Estate

Post: House Hacker Question: Paying the same amount owning vs. renting

Post: House Hacker Question: Paying the same amount owning vs. renting

Post: House Hacker Question: Paying the same amount owning vs. renting