House Hacking with Family and Kids- NJ

[Mark Sinclair]

New to REI and new to BP just this year, but the content and information has been something I have dove into every single day. One of the common themes I have seen on some of the newer investor forum post is advice on how to get started. For me it was always this question and add to that how do you start if you already have loans to pay back, a family, and expenses you are already trying to decrease. The strategy of house hacking kept coming up, but there are not a whole lot of podcasts, or articles, or tips on how to make that work with a family and kids. I kept hitting a road block in trying to make a second investment property work along with our primary SF residence. We were too much of a risk, we had too much debt, it wasn't going to work... we hit no after no after no. I couldn't shake the belief that getting into real estate investing was going to be a long term beneficial decision, but we seemed to be stuck. I finally started to listen to those that were saying house hacking is a good start, so we started making some appointments to check out multi family homes in our area. We live in North Jersey, where cashflow is possible, but starting out is hard. We saw several places over several weeks and then came across a property that had a unique 2 houses on 1 lot being sold vacant. We ran the numbers and at first glance it seems like an awful situation with a -61% CoC ROI while we live in one of the units, but reminded ourselves that it would significantly cut down on our living expenses and when we move out to repeat the process we will have a 131% Coc ROI on that property with a great long term interest rate and cashflow. We will be living in the unit, fixing it up, renting out the other unit while we are there, then move out and rent out both units. We will also have the ability to refinance down the line after fixing up the place and installing a new bathroom.

The numbers made sense, it made it hard to say no to the opportunity. The hardest part was going to be making the switch, selling our current home, and as many families do make the move to a new house, but this time it was going to be a little bit different living in a multi-family setting. I can not stress enough the importance and impact your spouse or significant other can have on these types of moments and situations. I myself find times where I am questioning if this huge move is the right thing for us and my wife has pulled me out of those moments to encourage both of us. I wouldn't be able to do this and our family wouldn't be making this jump if is wasn't for her having an open mind and seeing the opportunity. I would have a hard time if all the while I had to convince her that this was a good idea, the support has been a huge part. 

From not thinking it is possible with kids and family, to making the jump, we are currently starting on the path to get the stack started towards building wealth through real estate.