All Forum Posts by: Kyle Gregg

@Chris Harkins definitely not looking to live with roommates. I am currently paying $1050/mo in rent, so in a sense ill be improving my situation. 

I am currently stepping into the world of "house hacking" and trying to calculate my potential cash flow on an owner occupied duplex financed through a 203k. I have a list of potential properties that i am going to see but the numbers are not working out how i hoped it would. 

In the areas of Baltimore that i am interested in living in, multi family properties are ranging from $100-$150k...(detached with a 2 car garage is what im going for)

So heres a quick break down of an owner occupied duplex:

Gross Potential Income: $13,200/yr ($1,100/mo)

Vacancy @ 8%: $1,056

Repairs @ 8%: $1,056

CapEx @ 5%: $660

Property Tax: $3,600

Insurance: $1,500

Net Operating Income: $5,328

Debt Service ($140,000 @ 5% for 30 years): $9,996

Cash Flow: -$4,668/yr (-$389/mo)

Seeing that I will be using a 203k to rehab the place upfront, am i overestimating my repairs & capex percentages? Would you consider this a poor take on "house hacking"? If i move out and rent the second unit, ill be positively cash flowing...but currently, it looks like ill be taking a small hit every month.

Any input, advice, recommendations will be appreciated. 

@Dooreuhn Cee 203k loan is for someone who wants to buy, rehab, and live in a property. not sure if a 203k will help in this situation if hes trying to wholesale. 

@Triston Murray 

You are completely correct. I was also overwhelmed with what i should do. Combined with being hesitant with reaching out to new people in fear of my lack of knowledge making me look stupid. Breaking that barrier is a must in this industry...i agree, relationships are key.

I had no idea which lender i wanted to reach out to, knowing it had to be a lender that was experienced with the 203k and had connections to contractors. Then out of the blue, a distant friend posted on facebook that she landed a new job at a brokerage as a loan officer...i reached out and found that she loves 203k loans and has plenty of contractors at her disposal. She got me pre qualified and now i am out looking for houses. Without her posting about her new job, i would still be sitting here twiddling my thumbs!

@Triston Murray as a first investment that's owner occupied, i think the 203K loan is a perfect vehicle to get me started. Wrapping the purchase of the house and the renovations into a single loan with 3.5% down at 5%...i don't see how i could get a better deal with an owner occupied mulit unit property! If i want to keep living here when i purchase a second property, ill have to figure out some creative financing. 

@Triston Murray 

Great post! I will be heading down that path very soon. I've been prequalified for a 203k loan and im going out this weekend with my agent to look at some multi families! congrats on getting it all put together. 

You can either hire a general contractor (GC) who will oversee the work. He will hire subcontractors to perform the various work. Or you can act as the GC and hire contractors to do whatever work you need done...electrical, drywall, hvac, plumbing, roofing, tiling, etc.

I would start doing a lot of research to get yourself educated, you really can't do anything until you establish a good foundation to build off of. Read books, listen to the podcasts, attend local meet-ups, browse the forums, and just take in as much information as possible. 

Start saving your money and working on improving your credit score. 

congrats! Share the details!

I say listen to them all! I listen to about 1 a day during my commute to work. Each podcast, even though it might not pertain to what you want to accomplish in real estate investing, has its own golden nugget of information. 

Podcast 014 with Ben Leybovich was a very good podcast. Just listening to him speak was very inspiring. 

Podcast 037 with Aaron Mazzrillo...guy is living the life, definitely someone to look up to.