All Forum Posts by: Sean Haardt

What is the best way to use the BP calculator to put together a PDF presentation for a prospective duplex househack? Wife and I want to move out of our townhome, rent it, buy a duplex with FHA, live in one half and rent out the other. We have a duplex we are about to put an offer on which has both sides currently rented on month to month, and one side with tenants for last 16 years and we want to make a good presentation and packet for the lenders we are shopping for, but I don't know which BP calculator to use to run the math and get a PDF from.

Also, a broker we are talking to said we easily qualify financially but her underwriter will require us to 1) move out of our townhome first into a temporary month to month rental, and 2) rent out our townhouse first and 3) then show the underwriter the 1-year minimum lease to satisfy them that we are not going to commit fraud and not move into the duplex. I know what the law says about owner-occupy requirements on a HUD home, FHA, or any other owner occupant situation but I find that absurd and even more risky. So I am looking for other lenders for their opinion. What if the loan doesn't go through and now we have two monthly payments? Not to mention the hassle and expense of moving twice... thanks for any advice BP.

Thank you @Joe Villeneuve. I really appreciate it. This is eye-opening info. I've  obviously got some more learning and research to do. Thanks for your help. I'll look for you on the forums. I'll let you know if I get the property after all.

@Joe Villeneuve

Thanks Joe. This is what I was hoping to do: 

If first we can come to terms about the roof and any foundation issues,  and I thoroughly vet his expenses that he claimed in the appraisal and they check out, I lease the 7-unit property from him for an agreed amount with a selling price well below the 2016 appraised value of $240K. I put 5-10%  down (he initially asked for 10% down, but I think I can get in for less) and an option to buy in 1-2 years, preferably 2. I hope to increase the NOI with some renovations and raised rents that if you remember he hasn't done due to lack of interest (he has a 3 bedroom renting cheaper than a 2-bedroom). I realize there will probably be some turnover during this period. Even if  I can't do a cash out refi after I've raised the value, I still can exit by keeping the property as I know this property cash flows pretty well, and I will have gotten in with little cash down. He currently pays 7% going to  property management . I've been in every unit and toured the property several times.  A plus is that it is sub-metered for both gas and water already.  That's one thing I wanted to do right off the bat is start having tenants pay some utilities but gradually so they have time to either adjust or move out.

@Joe Villeneuve Thanks Joe. BP wouldn't be what it is today without people like you that give of their time. If he owns the property outright, does it still hold true that the lease option is out of the question? 

@Joe Villeneuve

... and no that wasn't a mistake,  the one bedrooms are more expensive than the two bedrooms.  He just hasn't changed the rates in so long...

@Joe Villeneuve

Thanks Joe for your questions and answers. i've got an 18-month old running around so please forgive my delay.  Let me give you what I've got answers to.  

First off, I know motivated was not accurate. That's true. He just wants to sell and avoid capital gains I imagine. I'm having lunch with him again soon at his diner and can ask more questions, but would like to narrow it all down abit more and make the most of our time, mentioning the lease option.

Answers to your questions:

Q1: The 7 units are broken up into  four 1-bedrooms and three 2-bedrooms.

Q2: Effective Gross Income was 34,374, less expenses at 15,933 add Expense reimbursements at 3094, results in NOI of 21,535.

Q3: It is a weekly, not daily. The tenants have all been there over 1 year, some as long as going on 4 years. I would change the leases to monthly upon takeover. 

Q4: There were a couple vacancies a couple years ago, yes. It is accounted for in the  appraisal at 15% vacancy rate. 

Q5: Teh 1 bedrooms are going for $490, the two bedrooms for 475. He just hasn't updated the rent in a while. I get the feeling he just isn't into managing the property anymore. He pays a manager that works for him at his other business he owns 7% to collect rent and manage little stuff. 

Q6: That is a tough one. Possible foundation issues I had inspected but the inspector was useless. Roof needs replacing, so 20K? But h said he would replace roof with a metal one. 

So my question to you is still, would a lease option protect me enough? What other items should I look at. I have a 50 page appraisal in front of me with a lot of info. 

Thanks for your time Joe.

@Jason Hartley

I just noticed you do use RD for 1099s. Do you do Schedule Es as well?

@Jason Hartley

Hi Jason. I saw this thread and had a question. I just started using Rentec  as well and only have a couple units. I love the customer support. Do you use it for your bookkeeping/accounting needs also, though? I've been trying to decide between Wave, QB online, or freshbooks and didn't even think about using RD for accounting until I saw this thread. Any insights would be appreciated. 

Thanks to BP i have my first duplex. I've listened to every podcast. "Read" about a dozen audio books recommended on here, many of them twice. Thanks BP community:

Earlier this year I found a 7 unit converted house, submetered gas and water, fully rented, stable market just received marijuana plant with 130 jobs, and have a 72-year-old motivated seller who is unloading some of his properties as his children don't want them. He does not need the money quickly and is offering seller financing, 10% down. He even supplied me with a copy of the appraisal and his expenses from last year. The NOI is $21,500 and expenses are $15,000 with a projected gross income of 40K. My cash is tied up for next few months, and house needs a lot of repairs as well. House appraised for $240K but I know he will sell it for less. I have met with him several times. If I had more experience, I'd probably know what to do, but is there a way to give him and incentive instead of the 10K down if he is willing to do a lease option or something like that? Needs a new roof, possible foundation issues, and each unit needs some TLC, which is why I want a lease option in case I find the foundation is too much to handle or something. Good news is I have the best contractors. I don't want to get in over my head though. I was hoping to refi in a few years and get cash back out at the new value after rents are increased. Rents are .very low right now and tenants are on week to week. Has a lot of potential, but also could be a money pit. Any advice on if a lease option is the way to go or should I walk away. Thank you BP.

Hello BP. I've listened to every podcast and am wondering how to find a lender for a cashout refi. I purchased my first duplex this year, reahabbed it, rented it, but don't know how to find a lender to refi. Do I need to pay for every appraisal as I search for a lender??