Recent House Hack in Charlotte

[Anthony Swain]

Hey everyone,

I have been in MIA on here for a few months, but I want to get back in the habit of posting to help other investors on their journeys. After being away for a while my inbox was full of people saying my previous forums were helpful, so that is encouraging for me to get back at it.

I wanted to share numbers from a recent house-hacking experience here in Charlotte, NC. My goal for this post is to give some insight into how a realistic house hack can shake out for someone in this area.

A LITTLE BACKSTORY:

This was a couple looking for their next house hack in Charlotte, NC. They were experienced investors, so they had an idea of what they were looking for and realized they may need to get creative due to the lack of inventory in the area.

They had a search set-up for multi-family and for any single family homes with 4+ bedrooms to see if there were any possibilities of creating a separate living space. After viewing a few potential multi-family homes, we realized they were not in desirable locations or needed large rehab projects. Shortly after they found a 5 bedroom/4.5 bath SFH that was renovated to be split into two separate units with separate entrances. It was a split-level home with upstairs being a 3/2.5 and the bottom unit was a 2/2 "apartment". The SFH search with multiple bedrooms helped find this property (wasn't listed as multi-family on MLS). The property was on market for a long time due to poor listing pricing with previous agents and the seller being out of state.

List Price: $475k

PP: $465k

DP: $23,250

Closing Costs: $0 ($14k seller credits) Negotiated seller credits & a brand NEW architectural roof.

*Used to cover CC & Buy Down Rate

*2/1 Rate Buy Down to 4.25% in year 1 then 5.25% in year 2

Renovations & Furnishings (MTR/STR): ~$20k

Cash Invested: $43,250k

Just a quick aside, I think now is a great time for investors, because there are a lot more people on the "side line". I'm willing to bet if rates trend down significantly than getting this property under contract would have had even more competition. Also, high days on market properties are worth digging deeper on to find seller's motivation and potentially unlock a good deal.

This couple will live in the top 3/2.5 unit & rent the bottom "apartment unit".

Rent $2k/month as MTR conservatively. They may consider STR too with more potential income.

Vac (5%) -$100

Main. (5%) -$100 Insurance $100

Cap Ex (10%) -$200 Taxes $220

Utilities -$150

NOI $1,130

PITI+PMI= $2,473

Net Income as HH (aka their cost per month)=

$1,130 - $2,473 = -$1,343

This couple will be splitting roughly $1,300 per month to live in a 3/2.5 house in South Charlotte near breweries, restaurants, coffee shops, and a short drive to South End, South Park, or Pineville.

So you may ask, "What about the ROI?!"

Well, here is where things get better for them!

*IMO every house hacker should include all of these numbers into their overall decision/calculations.

Cost Per Year to Live: -$16,116

Amortization: +8,507.69 for 2025 (aka loan paydown)

Appreciation (4%): +$18,600

ROI= $10,991.69/$43,250= ( 25%) !!!

ROI is GREAT by itself, but you can add in one more figure. Your housing expense savings.

Typical rent for a 3 Bed/2 Bath home is $2,300/month in that area of Charlotte.

Their housing expense saved is ~$1,000 = ($1,343 (current housing payment) - $2,300 (average rent)

~$12,000 per year in housing expense savings!

This makes their Total Net-worth ROI (NROI) much higher.

NROI= ($10,991.69+$12,000)

. $43,250

NROI= ~53% !!!!

If you're looking to find your next house hack in Charlotte or surrounding areas, then I would be happy to connect and share my experience.