All Forum Posts by: Nicole Carey

He did leave it open ended and said he would let us know if anything changes. Do you think best to wait a bit or to try to counter (if we can swing it. not sure we can) 

Trying to house hack our first property. We put an offer in on a 4 unit property that is FSBO. Seller countered at $5k less than asking price (asking price is 430k). We countered with 425 with 3% back and he was unwilling to budge. His property is poorly advertised with an ad on craigslist that doesn't even pop up if searching for multifamily. I cannot find it anywhere else. I am wondering if he actually wants to sell it. I don't think he's had any other offers and think our offer was pretty good. What gives and what would you do? The cash flow is negatives for the first two years if we were to pay all of the closing costs out of pocket. Is anyone willing to look over my numbers? I am a little confused on a few things. I have been using the bp calculator. It's in an up and coming neighborhood and I really think the time to buy is now.

Hello,

We are putting an offer on our first ever purchase. It's a fsbo 4plex (we are using an agent). 

I am trying to understand how the mortgage broker comes up with the PMI, MIP, Funding fee amount. Is there a way to know how much of the number is PMI, How much is MIP (I don't completely understand the difference)? I'm guessing 'funding fee' is how the broker gets paid? Please correct me if i'm wrong! Would also love if anyone would be interested in looking over our numbers.

@Shawn Foster on the top left

My husband and I have been looking to purchase our first property. The goal is to house hack with an fha loan.  

There is a FSBO 4plex that we have our eye on. Wondering if someone would look over the numbers and give a little advice. How much cash flow would you like to see on a 4plex? We would be putting 3.5% down. The place *NEEDS* nothing. We would likely put some sweat equity into it and for our dogs, we'd add a fence. Do I have to calculate that part? Every place we looked at needs a fence.

Asking price is 430,000. Last seller purchased for $389,000 and had to do extensive excavations/renovations to waterproof the basement/added tank, added commercial gutters, waterproofing membrane, etc. We estimate minimum of $30k was spent on that but he did a good job. 

All units are currently being rented so we would have to move into the 1BR for a few months when that lease expires until the 3BR opens up in May since it is FHA and has to be owner occupied (within 60 days I believe?)

1BR: $875 (can easily get $1000)

1BR: $875 (can easily get $1000 and we are thinking about trying airbnb for one of the 1brs. We are in a vacation town and airbnb apartments are doing well here) 

2BR: $1200 (basement apartment. probably capped at $1200) 

3BR: $1700 (potential for raising to $2000) 

Two 1BRs renting at $875 (we think rent could easily be $1000-$1100) 

Taxes $9300 (ughh, Vermont) 

Insurance $1600 (might be a little more since we'd be owner occupied and current owner is not) 

Heat $1878 (current owner pays heat- place has new windows and new insulation in basement apartment. When we need new unit we could potentially split it up but for now it seems easiest to keep as is) 

Electricity $474

Rubbish $432

Snow removal $385 (we could do this ourselves and ideally want to negotiate his snow blower as part of the purchase!) 

Water/Sewer $820

*Notes* Seller has area for washer/dryer for all units to access and pays for electricity/water for that included. I think we could make some additional income by converting to coin op. 

Upsides//Reasons we like it: 

-Nice owner occupied unit- We are picky. We need a big yard for our dogs and this place has that. It's not as easy to find as you might think in this college town where most multi family/4plex buildings are as big as possible on lots to maximize rental units. We have passed up many multi families because the owner occupied unit wasn't just right for us. This one fits the bill. 

I'm wondering how to calculate and how much do you sacrifice numbers for something that just works really well for your situation? 

I used the bigger pockets calculator with an offer of $400,000 and estimated 7.86 cap rate, 83.19% cash on cash roi, and monthly cash flow of $831.91 with low rental estimates. 

Downsides: 

-Basement apartment 

-Heat is included (could be split up but I think it might make sense to wait until furnace goes as it is a little old) 

I'd love any input! Thanks! 

My husband and I are looking into buying our first duplex, or triplex if the right one comes along. Right now we are really interested in one in an up and coming town. One side is a one bedroom that had rented for $975 - I think we could raise it to $1100 minimum or $1400 if the rental market continues to be as crazy as it is here. The side we would be living in would probably rent for $1400 minimum, potentially $1500 or $1600 in a year or two (hip town becoming hipper).  

My main question is: What kind of cashflow do you like to see? I am talking about a 2BR & 1BR duplex. Asking price is 265,000. 

Some more questions and details: 

There are a few improvements we'd want to make just for us if we could afford it, i.e. installing a door/deck to the yard for our dogs, finishing a garage and heating it for an art studio, insulating an odd closet off of the main bedroom/knocking down the wall to make the master bedroom much larger. We are still pricing out the costs for those things. Are these improvements things that we should be calculating to figure out if it would still be a good investment or should we just base the calculation on what the property would rent for now vs. asking price? 

If I did my calculations correctly using the bigger pockets calculator I think there would be cash flow of $190 if I used the low end of rent guesses; $500 for the high. I also believe I estimated high for the capex, vacancy, etc. Should I have added the management in if we will be managing ourself? If not, that creates another $175 of cash flow per month. Sorry if these are silly questions. I'm an newbie. 

they're so cute! 

Hello. An ideal rental for my business to grow has appeared to me. While I'm not sure if I should go into much detail about the store and what i'll sell, etc. the lease has a few ambiguous points. I was wondering if someone could give me some feedback? 

It states that 'tenant shall pay for all utilities, cinluding, but not limited to: electricity, heat, telephone, fire alarm changes, heat system maintenance costs, janitorial and cleaning charges and snow removal from xxx street in front of premises. and then in another section goes into more detail that I shall be responsible for 'normal maintenance of such items including, but not limited to heating and air conditioning systems' 

He said that the heating system is only two years old and that if something was broken beyond repair it would be on him but it is written out and sounds like there should be more detail. opinion? 

@Maple L. I would be careful of that neighborhood. I believe the rumor is that the airport is buying up a lot of the houses and the surrounding home values will tank. best of luck! 

@Raymond B. thank you! it is working now