All Forum Posts by: Luke Elliott Schneider

Yes, excellent tips from both of you! thank you @Ranga Ramanathan and @Travis Hughes!

Closing costs should be mostly covered by the seller if all goes well but I'll factor it in to be safe.

I have not had a chance to get inside to see the units myself, only pictures (which look pretty good as far as I can tell) so I'm not sure about rehab just yet. I do plan on doing updates/repairs to the unit I live in, then when a tenant moves out I can move into the vacant one quickly, rent out the updated one and get to work on the next. I hope to just keep track of costs for tax purposes and do it all myself.

I updated the spreadsheet with your suggestion and it looks like you were right about the cash on cash. Its almost 40%! As long as everything works out perfectly of course.

I will definitely do an exit strategy analysis and the mechanical and appliance formula seems like a great idea as well. 

The biggest factor in making this work, to me at least, is getting the market rents right. Do you guys have any tips for being as sure as possible that's right? My sources were mostly online sources, craigslist, Zillow, pad hopper, Trulia, rent bits, etc... Maybe a more accurate method?

Thanks again!

@Adrian Fajardo Thank you for your reply! I will give that a shot. I re-posted an updated version of this question here:

https://www.biggerpockets.com/forums/88/topics/421...

I'm a very new investor currently in a hot market hoping for some experienced advice on my first deal. Hopefully I found the right place!

THE STORY:

For the past year I've been working as much as possible and saving every dime I can while searching for a multi-family property in the hopes of using the house hacking strategy. I was sent an off market deal by an agent that specializes in multifamily properties a couple days ago, ran a quick analysis, as I've learned to do through this website, and found it to be worth perusing. I went ahead and submitted an offer with several contingencies in place to back out if I find anything crazy of course.

MY ANALYSIS:

THE VALUE:

The cheapest similar units I've found in the area are around $1300. I believe at minimum I can get the rents up to $1400 as similar units with similar sq footage in the area are renting $1300 -$1600 for 3 bed 1 bath and no garage. The current owner is absentee and apparently is tired of managing it from a distance. They've owned it since 2001 and don't seem to have kept up with market rental rates.

I have roommates already lined up and wanting to move in that will bring my rent down to $700. $300 cheaper than my 1 bed apt I'm living in now.

THE QUESTION:

I just don't know what else to consider. Is there anything else I may not be foreseeing about this deal that could make it awful? Is this a horrible idea?? I just need a second opinion, I hope I'm not being too hasty with this thing. If any extra info is needed please let me know!

Your time and help are much appreciated!!

I'm a very new investor currently in a hot market hoping for some experienced advice on my first deal. Hopefully I found the right place!

THE STORY:

For the past year I've been working as much as possible and saving every dime I can while searching for a multi-family property in the hopes of using the house hacking strategy. I was sent an off market deal by an agent that specializes in multifamily properties a couple days ago, ran a quick analysis, as I've learned to do through this website, and found it to be worth perusing. I went ahead and submitted an offer with several contingencies in place to back out if I find anything crazy of course.  

THE ANALYSIS:

4plex-540K 

20K down

INCOME: 

Unit 1- $1025

Unit 2- $1025

Unit 3- $1000                      **ALL UNITS 3bd 1 Bath and have an attached garage

Unit 4- $1000

TOTAL-- $4050/mo

EXPENSES:

FHA LOAN: 3609.15 per month

FHA Includes: annual taxes and insurance

taxes: $5522

Insurance: $1300

MAINTAINENCE: $1000/yr

UTILITES: $5600/yr

TOTAL: $550/mo

TOTAL EXPENSES: $ 4159/mo

CURRENT MONTHLY CASHFLOW: $4050 - $4160  =   **$-130**

THE VALUE:

The cheapest similar units I've found in the area are around $1300. I believe at minimum I can get the rents up to $1400 as similar units on the very same street are renting $1500 -$1600 for 3 bed 1 bath and no garage. The current owner is absentee and apparently is tired of managing it from a distance. They've owned it since 2001 and don't seem to have kept up with market rental rates.

My current rent is 1100, so moving into one of the 1000 dollar units would only increase my monthly expenses by $30 because of the negative cashflow. Not a big deal to me at all for starting out.

THE QUESTION:

I just don't know what else to consider. Is there anything else I may not be foreseeing about this deal that could make it too good to be true? If anymore info is required please let me know!

Your time and help are much appreciated!!

I am in exactly the same position up here in the Seattle area. What are your plans to finance? Have you found any interesting properties yet?