All Forum Posts by: Tim Shin

Hi All,

My wife and I are getting ready to house-hack@Brandon Turner style! 

We are trying to get a loan originator/officer who is very familiar with the FHA 203k loan so that we can house-hack owner-occupy low-money down duplex up to fourplex. Our agent came up with a great idea of single-family home renovating to a multifamily home which he knows a builder who has done this before. Anyone familiar or know anyone who knows the ins and outs of 203k loan in the Houston area?

Any help or recommendations for contractors and FHA consultants will be greatly appreciated!

Thanks,

Tim

@Yavor Tomov

Thanks for letting me know. How long have you owned the properties? What % would you calculate that vacancy to? What do typical 1-bedroom units go for on those streets? 

Apparently, my agent says, that duplex owner has been trying to sell these properties at over market price for years now in a condition that does not warrant those prices. @Account Closed how much do the closing costs typically range on FHA? I was expecting maybe $8000.

Anyone in Houston know of the vacancy rate to use for duplexes near UofH or TSU?

 Hi Barbara,

Good point. No I didn't price out the costs but I've seen some good kitchen reno's from rehabber friends of mine on single famili homes be in the range of $5-10k. So I figured for a rental, maybe $5k each unit.

After seeing the properties, the asking price is too much. They say they refused an offer at of $274k and the properties needs more work than a simple $10k AC job and kitchen reno's. The kitchens are poorly set up and walls need to be removed to get more reasonable counter space from them in a reno. The washer/dryer is right next to the stove and that's not the kind of place that commands $1500/month rents. Currently though, they could go for $1200 a month rents. There is not really space between the upstairs and downstairs units to run duct work for AC so you'd have to add ducts to the walls or use those individual room AC's that are a step up from window units. There is some foundation work that should be done at some point in the property's life but it isn't egregious for a rental. If you move walls though... Some of the windows looked like they were in bad shape and each one of those duplexes has about 30 windows. If a new window and frame costs $400 that's about $12k in windows. Tenants had taped up the windows at the edges to prevent air getting out...

We don't think these properties are deals for us: 2804 Cleburne St, Houston TX.

I think we'd like a bit of a nicer set up and I think there are less expensive properties to rehab into a better deal.

Anyone have more feedback?

 It's close to 1%. I had a frie put some eyes on it. There aren't really other fully updated units. The agent shows $1500 from comps fully updated but in a slightly different neighborhood. Direct comps that aren't updated go for $975-$1200. If I can go 203k loan with repairs and purchase negotiated down to total $300k, rents at $1200/month for both units, 5% capex, 8% vacancy near a university, 7% management fees, it's at .99% (almost 1% rule?) and $240 cash flowflow a month. But this requires negotiating down from $290k to $270k and reno only being  $30k. Which I think is $10k is good padding for ac and kitchen. 

Thanks! Anymore tips from Texas folks? We're about to go look at 4 duplexes!

 Thanks Tom! I appreciate your reply! Are you enjoying the house-hack? What unexpected things have you run in to?

Also about the repairs: I estimated that $10k for two full sized AC-units and duct work since it looks like there is only window units. Then $10k  for two kitchen reno's and then budgeting more in for surprises.

 Thanks Tom! I appreciate your reply! Are you enjoying the house-hack? What unexpected things have you run in to?

Hi All,

My wife and I are going to see several duplexes in near Emancipation Park and TSU in an area that is being developed.

There are duplexes that don't seem to need much help besides a kitchen renovation and some added A/C. I estimate costs of repairs and renovation to be $20-30k. If we buy, this would be our first house purchase. We more than well qualify for an FHA loan and are pre-qualifying right now.

Please help me figure out if this is a good deal for house hacking, owner-occupying for a couple of years then moving out to cash-flow positive. What are things to be looking out for when I go look at these places on Saturday? 

2/2 duplex, built in 1944

Asking Price: $290,000

Estimated Repairs: $20-$30,000k.

Rent rate after repairs: $1500

Current rents: $975

Down-payment at 3.5%: ? at $290k it's $10150

CMA by my agent I believe at $290k:
$1,386 Mortgage (3.5% down, 30 yr loan, 4% APR). How do I factor in PMI?
$ 300 Taxes (2014 HCAD appraised value at 2.66% taxable rate)
$ 200 Insurance (Estimated).

Elementary is a 6 on GreatSchools.

What do you think I should assume for maintenance, vacancy, and capex? Anyone have experience here? How do I determine the costs of monthly expenses beyond this?

Thanks! First post asking for help!

Cheers,

Tim

So I was thinking about starting a thread about this house. I wrote an essay and put in my $150 application fee. Turns out that the couple didn't get enough applications. I think their reserve was 2600 applications and they didn't get anywhere near that. So, they returned all the money. I just got my money back last week. 

I think it was an interesting idea and would have loved to see someone if not myself get a house for a total of $151 + closing costs. 

What do you guys think? To me it looks like an awesome way to get more than you can for a house if you got it in a desirable neighborhood and don't have the money to fix it up. 

@Brandon Turner did you see that? www.150house.com. They had a seller's disclosure. Once I find it maybe we can all figure out together how much it would have cost to fix it? Here's the seller's disclosure and inspection link http://www.150house.com/wp-content/uploads/2015/05/213Docs.pdf

@Jordan Johnson

 I can't believe there is a doughnut place that makes doughnuts with Killen's BBQ. Wow. I am flabbergasted. I'll have to try it out some time but I live in the Heights so it's a bit of a trek for me to get to Pearland for some doughnuts! 

Hey, killer tip: if you use an iPhone to listen to your podcasts, try listening to @Joshua Dorkin and @Brandon Turner at 1.5x speed. (2x is just insane because Brandon talks too fast for my slow Texan ears). That way you can get through podcasts faster. I'm not sure what the audiobook version is on, but listen to him fast too! It's particularly great for workouts at the gym. Strangely, I always feel particularly real estate motivated when I'm working out lol. 

You might try finding a realtor to help you invest that can keep an eye out for what you want in a MFH in Pearland.  

Also, I know it's not that close... but a lot of the deals I need to pass up on MFH come out of the Riverside Terrace, West University Place, U of H area, or Easton near Harrisburg. I've had to pass up some good deals there because we can't live that far south. For you, it would be the closest part of the city to Pearland and a reverse commute to work and family.