First House Hacking Adventure

[BellaPippin]

I did this in 2016. Depending on what type of 401(k) it is you can sometimes use the funds for your first home purchase without paying taxes on it.

All of life is risky. Each one of us could die today from anything. Regret is terrible to live with. (sorry I read a lot of Stoicism! haha)

Having a few months cushion helps for sure. If the place that you're buying needs some repair you can also look into an FHA 203K loan to roll repairs into the loan. A good friend of mine did that for a duplex.

Well of course, I know everything is risky but there's risks and risks did someone get the Simpsons reference

I could buy the place, even use my credit to fix stuff (my credit is in the 800s, ample credit line and I have no debt) but with no liquid savings at all after I buy, what do I do if I can't find a tenant on time or idk. X happens. Apendicitis. Full mortgage payment. You know. I feel it's a silly risk? Don't get me wrong, I'd love to go shopping like, today. I'm dying to. What was your train of thought? "F*ck it"? That's an honest question btw. xD

 

[tpuffer]

I may in fact make them an offer, but the house has a lot more wrong with it for my purposes. It was built in the 1840’s, so you can rest assured it has “character.” My other concerns:

1. Zoning… I would have to have this changed, and it is in a historical district. It doesn’t completely sink me, but it is big hurdle.
2. Historical Society… I can’t do anything without some a**hole saying that it’s ok
3. Cost of conversion…this only scares me when combined with all the other problems
4. Overall cost… after all these problems I don’t really like the price tag, which I assume means that I wouldn’t be able to assume their mortgage even if they did accept a lower offer. I just don’t like being so leveraged. I suppose this makes me conservative compared to you, @tpuffer… dude, you have got a pair on you!

My gut reaction? Look a bit more. Any of these problems might not be so bad by themselves, but all together kind of makes for a shit show. I think I can do better.

So I looked at another place today (a newer duplex) and it seemed great. It was another one that wasn’t listed anywhere, I heard about it from my brother-in-law. The owner is a contractor, owns several rentals and wants $110k for it, it currently rents for $525 per unit, they pay utilities, which is super cheap. The inside was perfectly new, and he does great work. Said the reason he’s selling is because it’s the only property he owes on and he’s ready to retire (in his 50’s).

I indicated in my original post that this might develop slowly, but who knows?

Agree with you on all those items! My inlays actually have a 3-unit that is in a historical district - and it has been a fight to get things done!

Leverage can be a great tool if you have a process and plan to use it correctly!

The contractor who owns the duplex pays utilities??

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Strategery]

The contractor who owns the duplex pays utilities??

Lol! No..the tenants pay them

 

[tpuffer]

Lol! No..the tenants pay them

Ok good! Have you fully underwritten the property yet then?

 

[Strategery]

Ok good! Have you fully underwritten the property yet then?

Nope. Just looked at it today.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Strategery]

Is the one unit they will show you unoccupied and the other two have tenants?

All are occupied. Yes, it's wierd.

"God help whoever removes this wall. There's no reason it can't be wall papered and painted. -R. Gagnon"

The F*ck?!

no skeletons popped out!

You have an unhealthy obsession with skeletons, sir.

 

[broswoodwork]

Update:

The triplex was falling apart and had a lagoon system. What’s a lagoon system? It’s a shit pond. No exaggeration. I was excited when I saw the aerial photos because I saw a “pond.” I like fishing, who doesn’t? Remember.. this is Kentucky, y’all. We like our moonshine clear and our shit in a pond (apparently).

Also, if you’re following this thread looking to learn about this process, I’ll say this. Don’t be squeamish. Don’t expect normal anything. The whole family was in the unit I looked at, with their shit everywhere. There were about 7 people total. It stunk (they always do). It was awkward. The owner was showing me the place, along with a realtor lady that laughed hysterically at all my jokes (she wanted to represent me). The owner was visibly shaking when he saw the inside of the unit, I don’t suppose he expected it to be so gross. A day after my visit they dropped the price by $10k. I guess if I could get it for nothing I might consider the brown lagoon as an option.

This is taking longer than I wanted. I’ve been prequalified for a loan, but didn’t realize how badly the lender’s rule about having three months reserves would screw me. Basically I *should* have enough for about a $330k property, closing costs and all. But with the aforementioned rule, I only qualify for ~$235k.

The shitty thing is that there is a property that would work. It’s $308k, four-plex with a vacant unit. It should cashflow well bringing in $2100/mo for the three occupied units. I’ve been in it, and it seems like a pretty good place. I’d like to get them down a bit though.

So I’m shopping for a less risk-averse lender, working as much as I can at my job (~55 hours weekly, business is slow), learning copywriting (why the F*ck not) and trying to get a clue as to what I am going to want after I get what I want.

I'm very interested in this shit lagoon concept.

Does the house's waste stack just empty into the backyard? I've heard of leeching fields (I don't think they're allowed in MA anymore), but a little frog pond of feces is another thing all together.

Would he give seller concessions to install a septic system?

 

[Strategery]

Is it reo?

Nope