All Forum Posts by: Frank Macias

Does the property cash flow? At that current rent, if you were to apply the entire rent amount to the cost of the new roof, you would recoup that cost in about 13 months. After you take out all your expenses from your rent rate you would find that the cost of the new roof will eat up your cashflow for several years.

To me, it sounds like you should sell as is. 

Hey @Tonette Whitted, there are plenty of online calculators to help you get an estimate of how much you can afford. In addition, if you have other debt i.e. student debt this will also affect the amount of income you will need to earn to afford that loan. 

You should connect with a mortgage lender and they can walk you through the process. Hope that helps. 

All the best,

Frank 

I wonder if any of those who attend are BP members. I would hope that anyone on BP would know better not to go to one of those real estate conferences. 

@Bryan O. great insight! Thank you all for your input. I was leaning towards the house hacking idea but my wife put some doubt in me. Thanks again! 

@Paulina Macias check it out.  :) 

Hello BP members!

What would you do if you were in my shoes?

We wanted to purchase a duplex and do the house hacking idea but what if we bought a duplex and rented somewhere else?

By us renting another apartment we could live in any part of the city we wanted and we would not have to live next door to our tenants. On the other hand we would have to put 20% down - which is possible for us it would just take a little longer (a few months) to save that much.

For apples to apples comparison let's say the cost of renting another apartment vs doing an owner occupied duplex broke down to be the same cost per month, which option would you choose? What are some pros and cons you see with each option?

Thanks for your input! I am eager to see what you guys have to say about this. 

@Wesley W. wow great email and follow up! Do you mind if I copycat your script? I can tell you have been doing this for a while. Thank you for sharing. 

@Paulina Macias

Tough situation to be in but you bought it for business not for charity. Since he has been there so long you maybe you can discount the rent for him and see if that is something he is okay with? Or finishing the basement in his unit and renting that out to another tenant?

I would let him know what your plans are with the property and be honest with him. 

@Chris Seveney great tips! I like your take on planning and budgeting for cap-ex in the next 5 years, I'll have to incorporate that into my future analysis. Also, the expenses between tenant turnovers is also very helpful. We would like to have either tile or LVT in our units so carpet would be switched out if we bought it that way. 

And yes, property taxes and home insurance would be about that price. ~$2200/yr for taxes and about $5,000/yr for insurance. 

Thanks for the input, much appreciated!

@Paulina Macias - check it out. 

Hello BP Members!

I need your advice/help/input analyzing a house hacking property I am interested in. The numbers appear to be good but I want to get your take on this to make sure I am not missing anything. Thanks in advance!

Purchase price: $280,000

Down payment: $20,000

30 yr fixed @ 4.25% (No points)

Closing costs: $6000

Rehab: $2000

Principal+Interest: $1280

Taxes+Insurance: $600

PMI: $190

Vacancies: 5%

Repairs/maintenance: 5%

Cap-ex: 5%

Monthly expenses: $~2500

Monthly income: $2900

Cashflow: $400/month

CoC: 17.18%

A couple of things to add:

• I have analyzed the deal as if we were not living because we will most likely move out after 1 year and keep it as buy and hold property
• Both units are sub-metered electrical/water and tenants will be responsible for utilities
• No HOA dues
• This property is in a flood zone and will require flood insurance - I have been given an estimate of what flood insurance would cost on this property and have over-estimated generously on this expense
• The property is in good shape, as far as we know their does not seem to be any major rehab issues. Just some cosmetic things to touch up (paint, kitchen cabinet paint, cleaning)
• If the property sat empty, we would still be able to afford the mortgage payment rather easily.
• It's not in a warzone
• Property details: 3/2 single family + 1/1 detached cottage on the property that my wife and I will live in.
• We will be self-managing

Thanks for reading I appreciate your input!

Hello BP Members!

I need your advice/help/input analyzing a house hacking property I am interested in. The numbers appear to be good but I want to get your take on this to make sure I am not missing anything. Thanks in advance!

Purchase price: $280,000

Down payment: $20,000

30 yr fixed @ 4.25% (No points) 

Closing costs: $6000 

Rehab: $2000 

Principal+Interest: $1280

Taxes+Insurance: $600

PMI: $190

Vacancies: 5%

Repairs/maintenance: 5%

Cap-ex: 5%

Monthly expenses: $~2500

Monthly income: $2900

Cashflow: $400/month

CoC: 17.18%

A couple of things to add:

• I have analyzed the deal as if we were not living because we will most likely move out after 1 year and keep it as buy and hold property
• Both units are sub-metered electrical/water and tenants will be responsible for utilities 
• No HOA dues
• This property is in a flood zone and will require flood insurance - I have been given an estimate of what flood insurance would cost on this property and have over-estimated generously on this expense
• The property is in good shape, as far as we know their does not seem to be any major rehab issues. Just some cosmetic things to touch up (paint, kitchen cabinet paint, cleaning)
• If the property sat empty, we would still be able to afford the mortgage payment rather easily. 
• It's not in a warzone
• Property details: 3/2 single family + 1/1 detached cottage on the property that my wife and I will live in. 
• We will be self-managing 

Thanks for reading I appreciate your input!