All Forum Posts by: Andrew Whicker

Also, these calculations assume the tenants will not pay for any of the water / trash / sewer, but I don't see why I couldn't transfer some of that burden onto the tenants.  The water is not split between units, but I could charge the tenant a flat rate for water (say $50 / tenant / month) that would cover most of the bill.  Is there another way to charge tenants for this bill when the bill is not split by meter?

It would help my cashflow greatly if I could transfer some of this cost onto the tenant and from the advice I've received from PM's, it seems that the rents they predicted do NOT include any utilities, including water.

Cheers,

@Albert Bui 

Thanks a lot for your info.  Something to look into.

@Aaron Montague 

Thoughts?

@Albert Bui 

That's good to know, I was told 20%.  So on this particular property, I'm able to go as low as 15%, correct?

@Jeff Arndt 

I can't buy a multi-unit with a 5% down conventional loan, I need 20%. I want to get rid of my PMI by increasing the property value and switching to a conventional 20% down.

@Albert Bui 

What is UFMIP?

@Aaron Montague 

- The note on landscaping was to reduce the water bill by $50 / month due to smarter landscaping which would increase my cashflow by $50.  (I live in a dry state and everyone waters their lawns)

- I will be managing by myself.  No need for including PM fees.

- A PM came back and said rents are between $675 and $775 per unit depending on quality.

Thanks!

This is what I thought.  I called a GC today and will be hearing back about a quote for a new garage.

Thanks, that's what I thought.

I was on the phone with a GC today.  We'll see what the quote comes out to : )

Hi,

Hoping to solidify this deal:

Overall:

Duplex

2000 sq ft total

3 bed / 1 bath each

Contract Price: $110,000

Monthly Costs:

Mortgage Type: FHA

PITI: $810 (4.25%)

Repairs: 0.15*$1350 = $202.50

Trash / Water: $155

Income:

Rent: $1350

Capital Costs:

3 month vacancy: $3510

3.5% down: $3850

Rehab: $6000

Inspection: $500

Returns:

Cashflow: $180

COC: 15%

Cap Rate: 10.2%

Unknowns (working to solve):

ARV (post repair / garage / desert landscaping)

Timeline of getting rid of PMI (add'l $125 cashflow)

More accurate assessment of rents

Cost of a garage / add'l appraisal value / add'l cashflow

Cost of desert landscaping / add'l cashflow (~ $50 - $75 / month) / add'l appraisal value

DIY window cost (estimated as half of contractor quote)

Re-Fi costs

Knowns:

No lender fee w/ 4.25% FHA

Closing cost by Seller

Thoughts?  I don't like the cashflow being below $100 / door, but in this case it could be reasonable given the possible upgrades. I'm concerned the add'l upgrades will lower the COC too much.

Cheers,

Andy

@William Hochstedler , @Allen Maris ,

Thanks for the responses!  I'm checking with my realtor to pull comps and I'm going to start calling PM's today.

Another related garage question:

Should I roll the garage cost up into the mortgage or take a different loan for it?  My question has to do with appraisals.  If I get the extra cash for the garage through the mortgage, then how is the house worth calculated? Will it hurt me if I want to get the house re-appraised after work on the house plus the addition of the garage?

I'm buying through an FHA and I want to get rid of the PMI as soon as possible. I was hoping to re-appraise and get close to my 20% down (changing to a conventional) after doing some work on the house and adding the garage.

Thoughts?

Thanks,

PS:

Previous house:

I didn't buy the previous duplex / triplex because it was too much of a mess. I called the electric company to see what the costs of an extra box were and he told me that the entire cluster would need to be brought up to code AND he wasn't sure he could add a third box due to zoning issues. That was the last straw.

I rescinded on the last day of my DD period. I'm glad I did. The next investor should just bulldoze the thing and start over. : )

Hi,

I'm interested in a 3 bed, 1 bath / unit duplex.  The duplex has a large yard and driveway, but has no garage (plenty of room for it).

The duplex is an up / down that I think can go for 650 - 700 / month of rent.

I want to build a free standing two car garage.  How much does a separate garage stall for each side increase rents / equity?  I understand you can't give me hard numbers, but I'm just curious of examples or rough estimates.

Thanks,

Andy

I can't believe they are (partially?) paying your legal fees.  They must feel very pressured by the media.  

I guess if you are Airbnb you have to pick your battles, but I'll just say that paying your legal fees seems way above and beyond.  It's the property owner's requirement to know the local laws and pay the consequences of not knowing.  Maybe I mis-understand Airbnb's role in vacation rentals, I thought they were little more than a marketplace.

And now theorizing that there is some competitor thing going on and the property owner needs to be involved in a lawsuit in order to get some money?  

I'm going to stop following this thread because I think it is going in an unhealthy direction.  Good luck and I hope everything works out for the best.

Cheers,

Thanks @Kathleen Leary ,

I leafed through a magazine last night while sipping some coffee.  I'm pretty excited to try my hand this.  We have a botanical garden in Ogden that I will take a walk through and write down the local plant names.  I don't think it should be illegal, but Ogden looks pretty silly when you see lush green lawns everywhere and the mountains are desert with scrub bush and the like.

It sounds like it is better to go to the bigger landscaping / nursery stores instead of the Home Depot's of the world, even though it will be more intimidating.