All Forum Posts by: Nicholas Morgan

Thanks both of you for your advice. Unfortunately, the deal fell through. The seller decided not to sell. However, I think that is a good point about all the paperwork that I'm unaware of. I think having her help me with this first deal whether it's on or off market is a good call. Thank you! 

Hello everyone. 

I'm entertaining putting an offer in on a 1 bedroom/1bathroom duplex. Here are the numbers:

LP: 115k 

Current rent: $600

I think I can get $700 at max. Realistically, probably $650

I pay water, so budgeted $80/month

Insurance will be $65/month

Property taxes: $190/month

I plan to house hack and use an FHA loan, so PMI would be $82/month

Vacancy: 8% of rent

CapEx: 7%

Maitenance: 7%

With those numbers and current rental amounts, the property is not profitable when I move out. 

At a purchase price of 100k, the property breaks even and since I don't have management factored in, I'll have to manage forever. 

Since I'll live in a unit, at a purchase price of 100k and current rent of $600 for second unit, I'll pay ~$465/month to cover expenses and set aside $120 to cover Vacancy, CapEx, and maintenance.

I don't suspect they will accept an offer like 100k, but who knows. 

However, at that price does it make more sense for me to rent somewhere? i'm getting married at the end of October and I quickly need to find somewhere to live. If I could rent an apartment for $600/month for a year while I keep looking, should I? I could continue saving up cash for a down payment in the future. I also wouldn't be responsible for issues like CapEx. Also, I wouldn't use up my FHA loan if I rent and can use that option for a different property in the future. I need to find somewhere quickly as the wedding is coming up, but I don't want to rush into a poor business move just because of this timeline I'm on. I'd love to not have to sign a lease, but maybe it's the best option? There's not a whole lot of properties that are in the locations I'm interested in and time is running out. Any advice on what to do? This property certainly isn't a homerun, but if I can get for $100k and bump the rents to $700, then I'd make ~$175/month positive cash flow once I move out (after sitting aside 22% for Vacancy, CapEx, and Maintenance). Which is nice.

Thanks in advance,

Nicholas 

Hello everyone.

I have been working with an agent for 2 or 3 months now. She's shown me 9 or so properties and has submitted 3 offers for me. Got one offer accepted and she helped through the inspection process (where we found issues and backed out). It's been a good business relationship. 

I've recently stumbled into an off-market triplex I might move forward with purchasing. Before the numbers discussion comes up with the seller, I'm curious how to proceed in relation to my agent. I certainly don't want to burn any bridges, but the seller isn't using an agent and I feel like I can get a better price and such by handling this without an agent. 

I understand that my agent doesn't get paid until we close on a property and excluding her from the discussion on this potential deal would prevent her from getting paid. So I thought if things move forward with the triplex that I'd give her $500 or $1000 of my own money as a thank you for her help thus far. 

What are your thoughts on this? This is my first time working with an agent and this would be my first real estate purchase so this is new territory for me. I don't want to ruin a business relationship. Your advice is appreciated. 

Thanks,

Nicholas 

Thanks for the info, Michael! That seems like something I could really take advantage of. Is it necessary to pair this construction loan with the main home purchase loan? For example, can I just get a normal FHA loan and then in like a month or two, can I get the construction loan? Do both loans need to be from the same institution? I've found a lender to use for my FHA, but if he doesn't do this construction loan option, can I just do that with another lender?

Thanks! 

-Nicholas

Hello!

I'm currently looking to put an offer in on a triplex. It has two 2 bedroom units upstairs, and then the walkout basement currently has another 2 bedroom unit it half. The other half of the basement is unfinished but can be turned into a 1 bedroom unit. There are even unfinished studs in place to turn this into a 1 bedroom unit. 

This would be my first deal and I plan to house hack and live in one of the units (the other two units are rented). I would like to finish the basement and rent it to live for free versus paying rent to myself. The current plan is to do an FHA loan on the house with 3.5% down. I'm getting married in October, so I'm trying to keep as much in my bank account as I'm going into this next stage of life. Because of this, I was wondering if I can pay more for the property and have the seller essentially write me a check for the additional pay.

He's asking about 155k for the property. Can I instead make my offer for 175k and then have the seller write me a check for 20k? This would go towards my closing costs and then the rest would go towards fixing up the 4th unit to rent out. Is this legal? If I make the mortgage company aware of my plans, are there any concerns? I don't have the cash to make this refurb on my own, so looking at ways to make it happen. 

On a similar note, any ideas for creatively financing the house with different means? The property is for sale by owner and recently taken off market due to many people low balling him and not seeing eye-to-eye on the price. He is an older gentleman and this sale is part of his retirement package plans. He does not own the property free and clear. The auditor website shows he purchased property for 135k in 2005. I've read a lot and listened to a lot of BP podcasts, but not sure what financing methods might work here (if any) or if FHA is the best option. Subject to financing? Perhaps something else? Maybe if I give him the downpayment directly, I could get a better deal by making payments to him each month? Not sure what could be applied well to this situation that is a win for both parties.

Thanks,

Nicholas 

 Sent! 

Good info, thanks! Yeah that makes sense that them calling me would mean higher motivation to sell versus a cold call.  

 Definitely will do! Good luck with your upcoming campaign. I might add direct mail on top, but I think I'll try phonecall first and see what happens. I'll keep ya updated!

Hello everyone,

I've been looking for a multifamily to house hack for about 4 months now. There are quite a few on the MLS where I live, but not in a location where my fiancee and I would like to live after we're married (I live in the greater Cincinnati, Ohio area. Plenty of stuff near downtown, but we both work north-west of downtown near Blue Ash and Loveland/Goshen area if you're familiar).

I'm about to switch to searching out off-market deals instead of relying on the MLS. We are getting married at the end of October and plan to use an FHA loan. Due to the FHA loan taking about 45 days for closing, we're kinda strapped on time in terms of finding a property in time to have closed by the wedding on 10/27.

My question is, has anyone ever placed phone calls to property owners to discuss selling instead of direct mail letters? If so, did it go over well? What are your thoughts on that approach?  I feel like the response time to a direct mail letter could be a long time and we might be able to get quick results by placing a phone call. What do you think?

Thanks! 

-Nicholas 

So I'm interested in a duplex (potential triplex) that is currently zoned as B2. It's my understanding that this means it's zoned as commercial property. Should I walk away, or is this nothing to be worried about? How could this negatively affect me?

Thanks,

Nicholas