All Forum Posts by: Zach Adams

Hi all -

I'm preparing to search for my first quad-plex.  For starters I'm looking for 10% Cap and $150k-200k.  Any feedback on areas or ideas would help me narrow it down.

Thanks!

Zach

Starting my search for $100k or less properties that adhere to 2% rule.  Here's a list of  areas where I speculate could meet this criteria:

Indianapolis, Cincy, Cleveland, St Louis, Tulsa, Grand Rapids, Milwaukee, Pittsburgh, Philly(?), Chattanooga, Birmingham.

Thoughts? Additions or subtractions?

Thanks!
Zach 

Thanks for sharing Derek B. I'm going through this right now. I have an old 1955 3/2 ranch that has undergone a tremendous amount of CapEx in the last two years. I'm not sure I could have even factored these costs in, given it was my first rental. 47% of gross rents yr 1 and 40% in yr 2 for repair/reno. Replacing ductwork this year. Vacancy and turnover has been minimal though! I'm now approaching this property as a flip and planning an exit strategy. In my calcs today, I estimate 10% Maint and 5% vacancy. Do you also put something in for CapEx? Zach

Great post and well-timed. Success, I suppose, is a bit of a mind state. Am I successful at REI? Well, I have 2 properties and working at optimizing them and rolling at least one of them into a MFH down the road. I'm a success compared to someone who hasn't started or just getting interested. Looking at some of the very knowledgeable folks on this forum, I realize how much there is to learn. Success is an interesting metric. To me it was also a success this week to delve deeper into my taxes, admit I didn't know what I was doing, and get a CPA to amend my mistakes. That's a success given I've resisted it for awhile. That's not a success if I'm CPA/tax expert and let this happen.

So there's multiple ways to measure success. Success for me today is directly proportional to my ability to be honest about my weaknesses and seek out those to help me. This is certainly the case in REI as well as many other aspects of my life. Admonition of my deficits is the key for me today!

Zach 

So I'm looking for a duplex to live in at least for 2-3 years. I've qualified for a 3.5% FHA loan, and have questions about what I can deduct. I own 2 SFHs so I understand the standard deductions. Can I use these standard deductions for the whole duplex property? Do I have to split these in half? Can I put this property, and my others, under a company and write-off not only the rental units but also the unit I live in for doing business?

From a more non-RE Specific place, can a self-employed individual working from home office write off housing expenses? To what extent?  BTW I have an appointment with a CPA next week ;)

Thanks 

Zach

I currently rent as well but am looking for a duplex to house hack. If I can find a good deal, cut my monthly mortgage payment in half (it would be half of what I'm paying now for rent), deduct large mortgage interest payments, taxes, insurance, expenses, depreciation etc from W-2 for 3.5% FHA loan downpayment, then that seems like it could be a good deal.

Zach

Sue Kelly I'm not quite ready to make a switch but yes, some of the decisions of late have been suspect. Having lived in the house for a number of years I'm aware of some of these issues. I've demanded multiple quotes and used my contacts before as well. I would consider, if more issues continue or surprises , attempting to self manage. I might know a good handyman in the area that could work for me. It's the CapEx that's getting me, not monthly maintenance. But I do plan on watching more carefully and entertaining the idea of a change.

Tyler Bain my mortgage broker is working through an FHA 3.5% down for me for an owner occupied duplex. Not sure about 3-4 units, they're still considered residential as far as I know. Definitely talk to some other brokers. The big banks are whack. Zach

Sue Kelly it could be. The previous tenants he put in there were fine for 2.5 years. Maybe I need to lower the rent too as someone mentioned earlier. I'm hesitant to switch PMs right now as the vacancy issue is a recent occurrence. Also I'm going to make sure I don't get charged the first month rent for the new tenant is a requirement of mine to stay with this company.

Neil G. No I lived in it for 7 years before I moved. But yes the tenants broke the lease 2 months into it. 2 young girls with a co-signing parent that made $40k/mon. PM says they work 30mi away and found a place that is closer.