All Forum Posts by: Ellie Narie
Ellie Narie has started 94 posts and replied 200 times.
Post: Can you buy a fourplex with NO income and NO money down?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
Let's say a friend is willing to sell you a fourplex for 80% of its value. Let's say you have no income and no money. You will owner occupy the fourplex. The other 3 units rent out for more than enough to cover the mortgage payment. In fact, I know that lenders use 75% of the projected rental income to qualify you for a loan. So, what if the 75% of the projected rental income is enough to make the full payment? And since your friend is pretty much "giving you" 20% equity, you don't really need a downpayment, right?
So, in this situation, would you be able to get a mortgage loan with no income and no money down?
If not, what if you have some little income, like $500-$1000 a month, would that make a difference?
Post: How much do you pay for cleaning service for your airbnb rental?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
Originally posted by @Julie McCoy:
@Ellie Narie I think you have a good overall idea re: house-hacking via AirBNB, but there are a couple of things about your approach you may want to reconsider.
- You want to be hands-off. Short-term rentals are not hands-off. You don't have to physically be at the property (all three of my rentals are either 200 or 2000 miles from my home) but guests require attention. It's a hospitality business - communication is essential, and there's a premium on prompt communication, which means within an hour or two. If that's more attention than you want to devote to the enterprise, start looking for something else to do.
- You want a 5-bedroom duplex. I don't know your specific market, but generally speaking, I do not see a market for this. Any party large enough to require 5 bedrooms is going to want a house, not a duplex. Also, how often do you think you're going to get guests that require that much space? I have a house that sleeps 6 in a vacation destination and it slows down a LOT when school gets back in session. Also, what kind of guests might want to rent a 5-bedroom duplex? It'll be a large group not wanting to spend the extra $ to get a real house. Accommodations that large will encourage parties. Do you want to deal with large groups and possible parties next door to where you live?
- Focusing on cleaning fees should be the least of your concerns at this point. Cleaning fees get passed on to the guest anyway, so that's really not a big deal if it's within market norms. (I pay anywhere from $40 to $80 for my cleanings, ranging from a studio in Tennessee to a 2/2 house in California) Having a live-in cleaner sounds great on paper, but how many guests are going to want to rent 4 bedrooms in a SHARED space? Very few.
Give this some more thought. You've got a good concept but the execution needs a lot of refining before you actually invest the money.
The reason that it would be 5 bedrooms is because I would rent it by the room. The more rooms, the more income. Many people rent just one room in their house, but this would be 5 rooms in a house I don't live in.
I don't mind being hands on, as long as I can do it remotely.
Post: How much do you pay for cleaning service for your airbnb rental?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
I'm also thinking about offering to rent one of the rooms for free to someone who would be willing to do all the laundry and light cleaning, such as putting dishes in the dishwasher. Has anyone done this? What are some possible complications that could come up?
Post: How much do you pay for cleaning service for your airbnb rental?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
I'm thinking of building a duplex, living in one unit, and having the other unit be an airbnb rental. I live in a small town that is close to outdoor activities, so it could be a good idea to do airbnb. I'm thinking of having the other half of the duplex have 5 bedrooms.
However, I don't want to be "involved" every single day. I'm okay with checking in every once in a while to see if the unit is upkept, but certainly not every day. Maybe a few times a month? In terms of checking guests in and out, I'm sure I could set up some kind of automated keyless entry system.
How do I outsource cleaning, and how much should I be paying for it? Laundry takes about an hour to wash and possibly an hour and a half to dry! That's 2.5 hours total. Plus half an hour to put on all the sheets and half an hour to take them off each day. That's about 3.5 hours from start to finish. However, during the laundry phase, there won't really be much to do. Do I still have to pay someone for the whole 3.5 hours, even if they're just going to sit around for 2.5 of those hours? How do you do it?
Post: What's the best way to build 1800 sq ft as an investment?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
Originally posted by @Rob D.:
Originally posted by @Ellie Narie:
Originally posted by @Rob D.:
Originally posted by @Ellie Narie:
I might qualify for a loan which would allow me to build up to about 3000 square feet after buying land. I will build an owner-occupied multi family home, and I will dedicate 1200 square feet for myself and my family. What's the best use of the other 1800 square feet, so that I can bring in the most money?
Should I build a duplex, and stuff as many 100sqft bedrooms as possible into the 1800 sqft unit? Maybe just have a kitchen area and have the rest be bedrooms, with no living room, and rent it out by the room? Or should I split it into 2-3 units? Perhaps do three 600sqft 3 bedroom units, again, with no living room area and rent it out by the room that way, so that it's only 3 different people sharing each unit? Or should I have "regular" units with a nice living room area? I feel like regular units would decrease my cash flow.
You may run into issues if there are too many people living there. Are you on sewer or septic? What about utilities? 18 people can go through a lot of utilities. Is the rent in the area high enough to cover your nut and still profit? What are you projected to clear ? Any analysis on that? If it’s 3-4% I wouldn’t even waste the time. Way too much effort for those returns
Do you really want to deal with 18 tenants? That’s a full time job. Are you gonna do mtm leases? Have you taken on account the possibility that you may not be able to get 18 people living in harmony?
You’re letting your “cash flow” turn into “greed flow” if you plan on doing a 18 room addition.
And 100 sq ft is really a 10x10 jail cell. I would never want to rent anything under those conditions. And I’m betting most people won’t. Unless it’s really really cheap.
Having two rentals with steady tenants and no headache factor beats 18 roommates that come and go and the rooms stay vacant for one to two months.
It would only be 3 roommates per unit if I build three 600 sqft 3-bed units. So a total of 9 people that I'd have to collect rent from.
That beats the 18 room headache you talked about.
Are your going to have individual leases or all occupants in the unit on one lease?
Individual leases.
Post: What's the best way to build 1800 sq ft as an investment?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
Originally posted by @Rob D.:
Originally posted by @Ellie Narie:
I might qualify for a loan which would allow me to build up to about 3000 square feet after buying land. I will build an owner-occupied multi family home, and I will dedicate 1200 square feet for myself and my family. What's the best use of the other 1800 square feet, so that I can bring in the most money?
Should I build a duplex, and stuff as many 100sqft bedrooms as possible into the 1800 sqft unit? Maybe just have a kitchen area and have the rest be bedrooms, with no living room, and rent it out by the room? Or should I split it into 2-3 units? Perhaps do three 600sqft 3 bedroom units, again, with no living room area and rent it out by the room that way, so that it's only 3 different people sharing each unit? Or should I have "regular" units with a nice living room area? I feel like regular units would decrease my cash flow.
You may run into issues if there are too many people living there. Are you on sewer or septic? What about utilities? 18 people can go through a lot of utilities. Is the rent in the area high enough to cover your nut and still profit? What are you projected to clear ? Any analysis on that? If it’s 3-4% I wouldn’t even waste the time. Way too much effort for those returns
Do you really want to deal with 18 tenants? That’s a full time job. Are you gonna do mtm leases? Have you taken on account the possibility that you may not be able to get 18 people living in harmony?
You’re letting your “cash flow” turn into “greed flow” if you plan on doing a 18 room addition.
And 100 sq ft is really a 10x10 jail cell. I would never want to rent anything under those conditions. And I’m betting most people won’t. Unless it’s really really cheap.
Having two rentals with steady tenants and no headache factor beats 18 roommates that come and go and the rooms stay vacant for one to two months.
It would only be 3 roommates per unit if I build three 600 sqft 3-bed units. So a total of 9 people that I'd have to collect rent from.
Post: What's the best way to build 1800 sq ft as an investment?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
Originally posted by @John D.:
Where will this project be? How is the land zoned? How large is the parcel?
Haven't bought the land yet, there are a couple of land options that are available, so it really depends on what I will want to build. It will have to be multifamily, at least a duplex, where I will occupy one side (1200 square feet), and the other 1800 sqft will be rented out. But I'm wondering if it's better to break it up into smaller units and build a fourplex. It's more expensive because there would be more kitchens.
Small-ish town, about 40 minutes away from a bigger town and about an hour away from a university. There is a community college in the small town.
Post: What's the best way to build 1800 sq ft as an investment?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
I might qualify for a loan which would allow me to build up to about 3000 square feet after buying land. I will build an owner-occupied multi family home, and I will dedicate 1200 square feet for myself and my family. What's the best use of the other 1800 square feet, so that I can bring in the most money?
Should I build a duplex, and stuff as many 100sqft bedrooms as possible into the 1800 sqft unit? Maybe just have a kitchen area and have the rest be bedrooms, with no living room, and rent it out by the room? Or should I split it into 2-3 units? Perhaps do three 600sqft 3 bedroom units, again, with no living room area and rent it out by the room that way, so that it's only 3 different people sharing each unit? Or should I have "regular" units with a nice living room area? I feel like regular units would decrease my cash flow.
Post: Is it considered fraud to hire your girlfriend as a housekeeper?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
Originally posted by @Jameson Sullivan:
What about buying a bigger property and getting a commercial loan?
I wouldn't mind that, but I'm looking for something with a low downpayment, such as 5%.
Post: Is it considered fraud to hire your girlfriend as a housekeeper?
- Investor
- Ashland, OR
- Posts 202
- Votes 38
Originally posted by @Nghi Le:
There are secondary, asset-based lenders who don't care about your personal financials (DTI, pay stubs, etc) and will lend solely based on cashflow. I've seen as low as 6% and 2 pts?
But this might not work for @Ellie Narie because they'd only lend on pure investment properties and it sounds like Ellie's planning to live in one of the units? Please correct me if I'm wrong.
Yes, I would be occupying one of the units.