All Forum Posts by: Charles Smith

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Minneapolis.

Purchase price: $405,000
Cash invested: $20,000

Contributors:
Jordan Moorhead

Closed on a duplex in a great neighborhood. We plan to live on one side (renting out our basement) and rent out the other. Expected to produce $64 dollars cash flow before reserves!

What made you interested in investing in this type of deal?

Eliminating our housing expense while finding a deal that will cash flow close to $1000 once we move out.

How did you find this deal and how did you negotiate it?

We found this deal on the MLS. As soon as it popped up we put an offer in right away.

How did you finance this deal?

5% down conventional loan (Home possible)

How did you add value to the deal?

We plan on remodeling both kitchens all bathrooms and basement bedrooms.

What was the outcome?

Rents for the property right now are way under market value. A $500 rent increase at minimum is very doable. The outcome will produce a great amount of cash flow once we move

Lessons learned? Challenges?

Be diligent in your research and ask a lot of questions. One thing Jordan Moorhead said that stuck with me is "We won't know until we ask"

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I couldn't thank @Jordan Moorhead enough for how effortless he helped make this process! I would highly recommend him to beginners like me looking for their first house hack. Jordan is a very calm person who is going to cut it to you straight which makes him easy to work with. I look forward to working with him on my next deal.

Thank you for the advice. I definitely will get everything in writing before I move forward. @Spencer Cornelia

I spoke to a broker, we plugged in some numbers together to see what that she will qualify for. A better way I'm thinking of doing this is to create a property management company (LLC) and manage my grandmothers property for her, so I can receive that cash flow legally. @Basit Siddiqi

Hello all,

I’m new here to BP. I’ve been reading and learning so much from the time that I discovered BP, so thank you all for for giving me confidences to pursue financial freedom.

I'm geared to get going on house hacking at the end of this month saving 20k. I estimate on getting an FHA occupancy loan at a very low interest rate my credit score is 760 and I have no debt.

My question is what are some areas you improved on, or became aware of when you got more into multi-family investing? Things that are easy for beginners to miss.

Any advice or comments will be greatly appreciated!

I really appreciate you giving me something to seriously consider. I’ll have to do a lot more research to even consider it @Joe Splitrock

I agree. Definitely have to tread lightly when dealing with family @Thomas Hatley

I definitely am hearing what your saying, things sometimes can get messy when family members pass. I’m willing to take that risk. Especially if I fully communicate with my grandma and sister to make sure they understand.@Courtney Jones

I thought about that, but I fully trust my grandma so I wouldn’t expect that to be a problem @Courtney Jones

Hello,

First time posting on the BP forums. First off Thank you all for your insight and knowledge!

I've been doing research for the past few months. Im going to take the house hack route. I thought of an interesting proposition. My grandma lives in a dump and is retired. She wants to move but doesn't want the duties of owning a house and being a landlord. If she got an FHA occupancy loan, but I funded the down payment would this be a smart idea?

Find a low cost duplex around $200k, rent out one side and have my grandma and sister rent out the other side for cheap(sister and grandma live together). Say the mortgage is $1,100 dollars, I rent out one side for $900 and my grandmothers side for 500. Really rough estimates but I would Cash flow $300 barring any maintenance cost and vacancy’s.

Seems like a win win, because I would essentially own a property (grandma would pass it down to me), my grandma would get out of the dump she lives in and pay way less rent. On top of the I wouldn't have a FHA loan under my name and I could buy a duplex for myself and try and cash flow it.

My grandma has good credit. I have more then enough for a 5% down payment and unexpected expenses.

Like I said this is a really rough brainstorm, But I would appreciate any input. Thank you all !