All Forum Posts by: Frank Macias

Auction.com is a reputable company. They have discussed it many times over the podcast. I have not used them personally but anecdotally know them to be reputable. As you know auction homes must be purchased with cash and all upfront. No mortgage are allowed on these properties. 

Hey Jean,

I am in a similar situation. I currently am living in GA and will be moving to FL next month and also switching employers. I spoke with my lender and they have told me that if I want to become pre-approved I would need at least an offer letter from my future employer stating I obtained a job from them. As far as getting the final approval and underwriting your loan, they are going to require information for your current employer (employer in FL not NY) for the loan to be approved. I hope that helps. I recommend speaking with your knowledgeable lender as they would be able to explain much better and tell you exactly what you need to do. 

Some would argue that if you have a positive cash flow regardless of the number it would be worth it. I’d set my standards much higher and would go for at least $100/door. Cash on cash >10%. 

Hey @Stephen Swanson,

I am also moving to back to Florida (Naples specifically) and will be doing the house hacking idea as well. In SWFL, the real estate is expensive but there are some, very few, but some properties where you can house hack and maybe break even but I think you have figured that out already. The further you go inland the cheaper the properties get typically. So if you want to live close to the coast you might be limited in what's available. 

Hey @Ben Visser,

Utilities might make or break this deal. Make sure the tenants will be responsible for the utilities otherwise you're going to have to factor in getting the place sub-metered for electrical/water (if it isn't already), which can be costly. 

Other things to factor in:

-rehab costs

-PMI

-closing costs

-for vacancies, repairs, cap-ex: I typically do 5%/each, 15% total (some may argue to be more conservative on your analysis)

As far as the cap rate, my understanding is the cap rate is more so for properties with >4 units. Maybe someone else could comment on that. 

Yes, it depends on your goals. Paying off the house note vs saving for future deals. But nothing says you can't do BOTH simultaneously. You can reasonably make an extra payment a year and save for your future deal. As far as the investing vehicle, you want to have that cash liquid in case you need it. So the only reasonable vehicle would be a high yield savings account which is around 1%. You may consider short term CD's but even these won't yield that much more than 1% and once the money is deposited it has to sit for the time of the CD. 

Excellent advice@JD Martin@John Underwood I had no idea that the house needs to be zoned as "multi-family"for it to be legally sub-metered. I have checked county records and it appears this house is zoned as single family. Just to be clear, this property because it's zoned as single family will not be able to be sub-metered? So from a tenant/landlord perspective, I would have to be responsible for all the utilities or pass it on to the tenants who would most likely complain about the bill every month. 

Hello BP members!

I am contemplating on purchasing a single family home that I will house hack. The property has an attached mother in law suite and an attached efficiency. The numbers look good (details below) but those numbers are based on the renters paying there own utilities. 

My question to you is, based on the numbers below, would any investor seriously consider purchasing this property knowing that this property is not sub-metered (electrical and water)? I would prefer to pass on the utilities to the renters but I know that sub-metering would require an upfront investment. Is this property too much of a hassle to submeter and is it worth it?

$380,000 Cashflow $765 ROI 10.8% Rent $3,400 ($1600, $1000, $800) Rehab $40,000

3/2 house with 1/1 mother in law suite and 1/1 efficiency. Both units have kitchens. Needs flooring throughout the house.

I will add that the above numbers are based on us not living there. The property has been on the market for about 1 year and they have consistently dropped the price and I believe they would be willing to sell the house below their asking price.

Thanks in advance for reading and responding to my posts. I very much appreciate your input. 

Hey Katie,

Are you using the biggerpockets calculator? I know you have to be a pro-member to use it but you can certainly use it up to 4-5 times for free. Also, I found a calculator that is similar to the biggerpockets but is unlimited in the amount of times you can use it. If you'd like to know where to find it send me a PM and I'll direct you to it. Like the others said this "deal" isn't a deal even without factoring in the rehab costs. Other than that, you'd probably want to look at your coc return and factor in your down payment as well. Hope that helps.