All Forum Posts by: Trevor Muzzy

Hey BP!

I am currently rehabbing a property in Tucson and am encountering an interesting situation as I run the numbers on the rehab and refinance. I purchased the property at 106.5k with a conventional 30% down loan and am looking to put 30-40k into the property rehab. I've had several real estate agents tell me that they expect the property to reappraise for 175k minimum and possibly up towards 200k (I realize that's not official but it's a ballpark estiamte). My concern is that right now the property cash flows really well with my conventional mortgage at 106.5k and 1200-1300/month of gross rents, but when I go to refinance that my monthly payment will jump up and the property will no longer cash flow (IE the property no longer fits the 1% rule). My goal is to hold onto this property for a long time as a buy and hold but I need it to keep cash flowing.

Does anyone have experience with a a similar situation who can offer suggestions about if/when I should refinance? How can I structure the refinance (larger downpayment?) in order to keep my monthly payments low and continue to cash flow the property?

Thank you in advance for your advice!

-Trevor

@Evans Emerson do you know of a good handyman around Wichita Falls?

@Josh James do you know of a good handyman around Wichita Falls?

Thanks everyone for your feedback! The property is pretty neglected right now but I have high hopes for it after we get all the deferred maintenance and renovations completed. What do you think of the area in general? To the north there are some rough patches but that area seems to be gentrifying from what I've seen.

@Jim Sestito we are getting estimates from multiple contractors to make sure we are sticking to our budget. Property management will likely be closer to 10%

@Naftali Tolibas I am considering using one unit as an AirBnB. Others in the area have told me they have great luck in that area, but I'm unsure if I want to be actively involved in AirBnB or go the more passive route with a long term rental.

Bird's Eye View

Street view

Hey BP community! I’m in contract on a duplex in Tucson and want to get some feedback on the numbers I am running on the property. What do you think about area & cash flow potential, and should I consider renting units on AirBnB? Property Details: 2830 N Park Ave, Tucson about 10 mins north of downtown and the university of Arizona. Duplex with separate 400 and 500 ft^2 unIts on the same lot. The larger is currently rented for $550 and the smaller one for $500. It needs a new roof on the back unit and front roof needs repairs. The front unit is livable but could use a cosmetic update. Both small units have wall HVACs (Is that sufficient for heating/cooling?) Property Numbers: Purchase price $108.5k w/ 20% Down loan at 4.75% gives me a $453 payment for principal and interest. Reno Costs: $3500 roof + $15k cosmetic update + $4k for other improvements/buffer = ~$24k Rent: $550 and $650 after repairs and updates with 9% PM fee, 8% vacancy. Other Numbers: 1200/yr property tax, $900/yr insurance, $1200/year MX/CAPEX, $250/yr eviction/lease renewal After running numbers, I’m seeing potential to cash flow $88-$256/month depending on how much units rent for. Also seeing between 2.75% and 6% cash-on-cash year 1. What am I missing? Would you move forward on this deal? Thank you! -Trevor

My first property was Turnkey and it was a great way to get a foot in the door, but I probably won't use that model again. Definitely be very wary of Turnkey companies!! Some sketchy ones will try to get you to forgo the property inspection, sell you a halfway rehabbed property, then stick you with terrible tenants. There are good ones out there, so make sure you choose your turnkey company wisely.

I own a rental property in Raytown, MO which is a suburb of Kansas City. Text me or email me we can talk more about it. Biggerpockets won't allow me to post my contact details on here.

-T

House hack using the VA loan... best real estate advantage you can get as military member.