House hacking in college/university

[Vashist D.]

I’m currently in high school, and learned about house hacking from the bigger pockets podcast. I am confused about how I can make some cash flow from house hacking a property near my future university. Which properties that would give me most profit, and how I can get a good deal in which after I complete college I can turn it into a rental. I hope someone would clarify how I would be able to afford and get a lender for a mortgage. Also how I would avoid vacancy, I worried that no one would rent by the room and I would lose money. Any other important advise would be great! Thanks

[Henry Clark]

@Vashist D.

You have many issues noted above.  Will try to answer each individually, but not in conjunction with each other.

1.  How to house hack.  Rent a home with 5 bedrooms and you rent the rest out.  Say $2,000 per month.  Have 4 people pay $500 per month and you don't pay anything, is an example.

2.  How to house hack.  Rent a Trailer for $800 per month, with two bedrooms.  Have someone rent one room for $500 and you pay $300.  As an example.

3.  Properties that give you the most profit.  At your stage, your not worried about Profit, but reducing Costs.

4.  Find out if your university allows Freshmen to live off campus.

5.  "Good Deal after you graduate so you can turn into a rental."- The odds of you wanting to invest in the same rental property, the odds the current owner will sell, the odds you don't move away and don't want to manage from out of state, etc, etc.  Ask this question later in your life, not now.

6.  "How can you afford and get a lender?"- Go down to a lending officer and ask them.  This will be a good exercise.  They will answer all aspects of the question.  Or ask a realtor to walk you through.  You won't get a loan at your age and income history.  You will need to get someone to Co-sign with you.  Don't do this to someone.

7.  Avoid Vacancy- You can't.  Need cash reserves.  Don't go with Month to Month leases.  Have their parents cosign the lease, the student has no wealth.

8.  "No one will rent"- That is the key to why Developers "CAN" make a higher return on their investments.  Look at your location (bus routes, nearby jobs, parking, near school, etc.) compared to other rental units.  Compare your room price versus a Single or Double Bedroom unit of comparable benefits.  Is it significantly less expensive.

I would focus on School your freshman year.  Let things shake out on your grades, people you meet, get to know the neighborhoods and markets.

Then look at doing a Trailer hack. Then a Trailer BRRRR. Then another Trailer BRRRR and keep adding. This is lower input, lower risk, lower reward. But an easier multiplier. Also reduces your Loan Qualification issue by a lot.

Doing a Trailer will teach you the majority of your REI learning at a far lower entry point and potential failure result, while still learning REI.

Are you PERFECT?  I'm not.  You will make some big mistakes early on.  By starting small they won't take you out of the Real Estate game for years.

Start small and Make Your Big Mistakes Early.