Should I House Hack again?

[Noah Bacon]

I think that the obvious answer here is to House Hack, but hear me out and please tell me what you would recommend!

I have house hacked 2 single family homes in Colorado Springs, moved out with both rentals cash-flowing very modest amounts annually, and am actively looking for the next property around Allentown, PA.

My 2 options: 

Add to my portfolio and House Hack for the 3rd time

I know that house hacking will be the easiest barrier to entry around a big down payment, has the chance for a lower APR with a primary residence loan, and I am comfortable using this strategy as I have done it twice in the last 3 years. I am looking at a 2 year horizon before I would move out and turn the property into a LTR to add to my small portfolio whether it be a SFH or a small MFH (4-plex would be my max).

I would have about $30k - $40k for a down payment, closing costs, and a few months of reserves. 

Sell my portfolio and scale into something larger

Over the last 3 years house hacking I have accumulated a decent amount in equity that I am very proud of, but am extremely hesitant in touching the equity to scale my portfolio at this time. 

I would have about $100k - $120k in equity before agent fees, closing costs, and capital gains tax if sold. I would not be eligible for a 1031 exchange, and when looking at refinance rates on 3% and 5.5% rates respectively, the numbers would not make sense to keep the properties and scale. 

Where my head is at and my future goals with REI

I am very hesitant to sell off cash-flowing properties and have the voice in my head saying "if it ain't broke, don't fix it". I have also never been in a position to have a substantially larger down payment in order to be considering a different REI strategy that house hacking.

I am investing in REI for my families future and have absolutely no intent of looking to "get rich quick", replace a job, or use father time as an excuse to make hasty decisions and potentially leveraging myself too far. I know so many investors that have "x doors" that will always be a number greater than I am actually looking to achieve.

I guess what I am wondering is if I am not being as ambitious as I should be to look for those larger deals, or if I should keep looking to add singles instead of home runs to reach my goals in this long journey.

Thank you for reading this, and if there are any other investors, like me, that feel like they don't know their next step please share your story! It is always extremely eye opening to see how our community can creatively find solutions as one. 

[Matthew Morrow]

Quote from @Noah Bacon:

I think that the obvious answer here is to House Hack, but hear me out and please tell me what you would recommend!

I have house hacked 2 single family homes in Colorado Springs, moved out with both rentals cash-flowing very modest amounts annually, and am actively looking for the next property around Allentown, PA.

My 2 options: 

Add to my portfolio and House Hack for the 3rd time

I know that house hacking will be the easiest barrier to entry around a big down payment, has the chance for a lower APR with a primary residence loan, and I am comfortable using this strategy as I have done it twice in the last 3 years. I am looking at a 2 year horizon before I would move out and turn the property into a LTR to add to my small portfolio whether it be a SFH or a small MFH (4-plex would be my max).

I would have about $30k - $40k for a down payment, closing costs, and a few months of reserves. 

Sell my portfolio and scale into something larger

Over the last 3 years house hacking I have accumulated a decent amount in equity that I am very proud of, but am extremely hesitant in touching the equity to scale my portfolio at this time. 

I would have about $100k - $120k in equity before agent fees, closing costs, and capital gains tax if sold. I would not be eligible for a 1031 exchange, and when looking at refinance rates on 3% and 5.5% rates respectively, the numbers would not make sense to keep the properties and scale. 

Where my head is at and my future goals with REI

I am very hesitant to sell off cash-flowing properties and have the voice in my head saying "if it ain't broke, don't fix it". I have also never been in a position to have a substantially larger down payment in order to be considering a different REI strategy that house hacking.

I am investing in REI for my families future and have absolutely no intent of looking to "get rich quick", replace a job, or use father time as an excuse to make hasty decisions and potentially leveraging myself too far. I know so many investors that have "x doors" that will always be a number greater than I am actually looking to achieve.

I guess what I am wondering is if I am not being as ambitious as I should be to look for those larger deals, or if I should keep looking to add singles instead of home runs to reach my goals in this long journey.

Thank you for reading this, and if there are any other investors, like me, that feel like they don't know their next step please share your story! It is always extremely eye opening to see how our community can creatively find solutions as one. 

As an lehigh valley native, I'd suggest sticking with house hacking, especially given your success and comfort with this strategy. The Allentown market is ripe for both single-family and small multifamily properties, fitting well with your cautious and gradual portfolio growth approach. Your hesitance to leverage equity for larger deals seems wise, particularly since your goal is stable, long-term investment rather than rapid expansion. Continuing to house hack allows you to expand your investments at a manageable pace and maintain a lower risk profile, aligning with your commitment to your family's future.

Our whole portfolio is here, and it all was made possible in the beginning stages by house hacking and equity build. We operate a pretty substantial investor Agent team here as well, and are very involved in education and helping people build and scale.  Feel free to reach out directly if you’d like to chat sometime. 

[Noah Bacon]

Quote from @Matthew Morrow:

Quote from @Noah Bacon:

I think that the obvious answer here is to House Hack, but hear me out and please tell me what you would recommend!

I have house hacked 2 single family homes in Colorado Springs, moved out with both rentals cash-flowing very modest amounts annually, and am actively looking for the next property around Allentown, PA.

My 2 options: 

Add to my portfolio and House Hack for the 3rd time

I know that house hacking will be the easiest barrier to entry around a big down payment, has the chance for a lower APR with a primary residence loan, and I am comfortable using this strategy as I have done it twice in the last 3 years. I am looking at a 2 year horizon before I would move out and turn the property into a LTR to add to my small portfolio whether it be a SFH or a small MFH (4-plex would be my max).

I would have about $30k - $40k for a down payment, closing costs, and a few months of reserves. 

Sell my portfolio and scale into something larger

Over the last 3 years house hacking I have accumulated a decent amount in equity that I am very proud of, but am extremely hesitant in touching the equity to scale my portfolio at this time. 

I would have about $100k - $120k in equity before agent fees, closing costs, and capital gains tax if sold. I would not be eligible for a 1031 exchange, and when looking at refinance rates on 3% and 5.5% rates respectively, the numbers would not make sense to keep the properties and scale. 

Where my head is at and my future goals with REI

I am very hesitant to sell off cash-flowing properties and have the voice in my head saying "if it ain't broke, don't fix it". I have also never been in a position to have a substantially larger down payment in order to be considering a different REI strategy that house hacking.

I am investing in REI for my families future and have absolutely no intent of looking to "get rich quick", replace a job, or use father time as an excuse to make hasty decisions and potentially leveraging myself too far. I know so many investors that have "x doors" that will always be a number greater than I am actually looking to achieve.

I guess what I am wondering is if I am not being as ambitious as I should be to look for those larger deals, or if I should keep looking to add singles instead of home runs to reach my goals in this long journey.

Thank you for reading this, and if there are any other investors, like me, that feel like they don't know their next step please share your story! It is always extremely eye opening to see how our community can creatively find solutions as one. 

As an lehigh valley native, I'd suggest sticking with house hacking, especially given your success and comfort with this strategy. The Allentown market is ripe for both single-family and small multifamily properties, fitting well with your cautious and gradual portfolio growth approach. Your hesitance to leverage equity for larger deals seems wise, particularly since your goal is stable, long-term investment rather than rapid expansion. Continuing to house hack allows you to expand your investments at a manageable pace and maintain a lower risk profile, aligning with your commitment to your family's future.

Our whole portfolio is here, and it all was made possible in the beginning stages by house hacking and equity build. We operate a pretty substantial investor Agent team here as well, and are very involved in education and helping people build and scale.  Feel free to reach out directly if you’d like to chat sometime. 

 Thanks for the reply, Matthew! I am a Lehigh Valley native too (Emmaus), and am looking forward to coming back to the area to invest in and also call home. I am certainly leaning toward house hacking again, and will likely be looking at the end of the summer/early fall.

[Matthew Morrow]

Quote from @Noah Bacon:

Quote from @Matthew Morrow:

Quote from @Noah Bacon:

I think that the obvious answer here is to House Hack, but hear me out and please tell me what you would recommend!

I have house hacked 2 single family homes in Colorado Springs, moved out with both rentals cash-flowing very modest amounts annually, and am actively looking for the next property around Allentown, PA.

My 2 options: 

Add to my portfolio and House Hack for the 3rd time

I know that house hacking will be the easiest barrier to entry around a big down payment, has the chance for a lower APR with a primary residence loan, and I am comfortable using this strategy as I have done it twice in the last 3 years. I am looking at a 2 year horizon before I would move out and turn the property into a LTR to add to my small portfolio whether it be a SFH or a small MFH (4-plex would be my max).

I would have about $30k - $40k for a down payment, closing costs, and a few months of reserves. 

Sell my portfolio and scale into something larger

Over the last 3 years house hacking I have accumulated a decent amount in equity that I am very proud of, but am extremely hesitant in touching the equity to scale my portfolio at this time. 

I would have about $100k - $120k in equity before agent fees, closing costs, and capital gains tax if sold. I would not be eligible for a 1031 exchange, and when looking at refinance rates on 3% and 5.5% rates respectively, the numbers would not make sense to keep the properties and scale. 

Where my head is at and my future goals with REI

I am very hesitant to sell off cash-flowing properties and have the voice in my head saying "if it ain't broke, don't fix it". I have also never been in a position to have a substantially larger down payment in order to be considering a different REI strategy that house hacking.

I am investing in REI for my families future and have absolutely no intent of looking to "get rich quick", replace a job, or use father time as an excuse to make hasty decisions and potentially leveraging myself too far. I know so many investors that have "x doors" that will always be a number greater than I am actually looking to achieve.

I guess what I am wondering is if I am not being as ambitious as I should be to look for those larger deals, or if I should keep looking to add singles instead of home runs to reach my goals in this long journey.

Thank you for reading this, and if there are any other investors, like me, that feel like they don't know their next step please share your story! It is always extremely eye opening to see how our community can creatively find solutions as one. 

As an lehigh valley native, I'd suggest sticking with house hacking, especially given your success and comfort with this strategy. The Allentown market is ripe for both single-family and small multifamily properties, fitting well with your cautious and gradual portfolio growth approach. Your hesitance to leverage equity for larger deals seems wise, particularly since your goal is stable, long-term investment rather than rapid expansion. Continuing to house hack allows you to expand your investments at a manageable pace and maintain a lower risk profile, aligning with your commitment to your family's future.

Our whole portfolio is here, and it all was made possible in the beginning stages by house hacking and equity build. We operate a pretty substantial investor Agent team here as well, and are very involved in education and helping people build and scale.  Feel free to reach out directly if you’d like to chat sometime. 

 Thanks for the reply, Matthew! I am a Lehigh Valley native too (Emmaus), and am looking forward to coming back to the area to invest in and also call home. I am certainly leaning toward house hacking again, and will likely be looking at the end of the summer/early fall.

Sounds great!! will send you a DM.  Feel free to reach out if you ever need help. 👍🏠

[Dave Foster]

@Noah Bacon, You mentioned a modest cash flow from your two properties. Before you get too depressed at the amount you're making from those properties you need to run an IRR analysis (internal rate of return). and get the real impact on your return from amortization of the loan, depreciation, and appreciation as well as cash flow. It might make your day!!!

[Bill S.]

@Noah Bacon My vote also for the house hack approach. The sell and scale up crowd don't mention the costs associated with that approach. You have all agent fees as well as title fees etc. Those fees are based on the whole price of the property so selling property with 20% equity can shrink down to 10-15% equity pretty quickly which means you lose between 1/4 and 1/2 of what you made. 

Hang tight for now. Build some more equity and see how it is to have your properties some distance away from yourself. You can always scale up later if you find you don't like the long distance landlording.

[Noah Bacon]

Quote from @Bill S.:

@Noah Bacon My vote also for the house hack approach. The sell and scale up crowd don't mention the costs associated with that approach. You have all agent fees as well as title fees etc. Those fees are based on the whole price of the property so selling property with 20% equity can shrink down to 10-15% equity pretty quickly which means you lose between 1/4 and 1/2 of what you made. 

Hang tight for now. Build some more equity and see how it is to have your properties some distance away from yourself. You can always scale up later if you find you don't like the long distance landlording.

 Thank you for your response, Bill! I am certainly afraid of the unknown, which would include those fees eating up the equity that I have built to date. As stated in the post, I am definitely leaning very heavily to investing in another house hack and building up the equity further for future plans.