All Forum Posts by: Jimmy Hung

Hi There!  I'm a new OOS investor looking to invest in Oxford, MS due to some recommendations and the low entry point.  I noticed the properties there have been sitting on the market for some time though, looking to see if I can get any insight on the potential of Oxford as an investment?  Any info would be greatly appreciated!

@Corey Hawkinson

Thanks Corey. That's my main concern. I mean worse case scenario, I would just rent it out as a SFH but that would hinder my cash flow. I am partnering up with my PM to see different options to lease and I think the best would be to lease out to a family where they have someone like a grandparent living right next door.

That’s a great idea about leaving a letter to the neighbors.

Let's say worse case scenario I can only rent it out as a SFH and my is reduced by $400, is the risk worth the reward?

@Tina Tsysh

thank you for the advice. I asked this to Corey but could a city really stop you from operating rental as a duplex? I know I can’t separate mail boxes and the utilities will already have some sort of split.

I think if it in terms of my own home and if I wanted to rent out a room, I could do so regardless of whether the city knows of it or not. I just know that my city doesn’t allow short term rentals.

In terms of the denial, it doesn’t state why. Just that it was brought to the board and was not approved. The seller thinks that since the property was converted to a duplex without first getting approved, the city is just stubborn to change it.

@Corey Hawkinson

Thanks Corey. The denial says that I have to operate it as a single family rental. Could they really stop me if I rent it out as a duplex?

It’s not separate meters, but my pm will be able to pass the utilities over to the tenant.

The units are broken up as: 4/1 & 1/1. The plan is to rent it out to a family and advertise the other side as a MIL (mother in law) suite so it’ll make renting out the entire thing easier.

Hi BP,

I’m looking for my first real estate deal and found one out of state in Middletown Ohio. It’s a duplex that’s zoned as a single family. Here’s the stats:

Purchase: 120k

Rent $1590

Utilities paid to tenants

Fully rennovated (new roof, electric, hvac)

Insurance: $1100

Property tax: $2400

After all repairs, vacancy, capex, I would have a cash flow ~$500/month with a CoC of around 24%

I’m able to get a lender to lend on this property for 25% down and my insurance agent is fine insuring it as a duplex.

Only thing is if the appraisal comes low, then I'd have to pay the difference, but the comps for a SFH are in the similar range. I plan to buy and hold, so I'm not too concern with the difficulty in selling it.

I tried reaching out to the city to get it rezoned but was denied.

Is this a deal you would do? If not, why?

@Dmitriy Fomichenko

Got it, so I guess a self directed will be worthwhile investing in someone else or a syndication then.

I see, so to get around this, would you have to make the purchase by creating an LLC?

@Zach Boone

Thanks Zach, I just sent a message to connect and go over some info if you have the time

@Clint Bolton

Thanks Clint. That’s very reassuring to hear. I was really surprised to see this, granted it’s a general data of the entire area.

@Senia E Cuevas

I’m new to investing and looking into apartments as well. All of the advice here are great and you should run your numbers to be as precise as can be. For example I thought 300/unit for insurance annually would be sufficient for a 14 unit, but my insurance quoted me 1k/unit. So if I can get an insurance to insure me on agreed upon value vs reconstruction, then it’ll kill the deal for me.

Also, if you go conventional loan, it’ll be 25% and 25 yrs. but you can look around for difference types of loan. I have the ability to do a 15% 5/1 Arm loan (which I would plan to refinance out once I could get the noi raised and stabilized). From what I’ve learned, reserves is key in order to hell you weather out rough parts.

Not sure if you could utilize your 401k like a self directed Ira, but I would try to do as much creative financing to boost your reserves to help with any unforeseen things that’ll come up.

Lastly be weary that you’ll probably expect a high vacancy the first year, it just happens. Run your numbers conservatively. I like to run my numbers with actual rent and then run different scenarios of rent increases to see if I’ll still be able to cash flow or if I’ll have to be paying out of pocket monthly for a period of time.