Post House Hack Investing

Post House Hack Investing

Rental Property Investor · Columbus, OH · Member since 2017 · 31 posts · 35 votes

Hello BP!

I completed my first House Hack (duplex) almost 6 months ago! and am planning on doing another HH (4 - plex) when I can, I'm also looking to break into small mulit-family ((8 - 15) units) as my first "real" investment by raising private capital, both by the end of the year hopefully.

My question is meant to start a conversation as I look at House Hacking as dipping your toe in the water prior to diving in, there is not much information on what to do between dipping your toe in and swimming... so, 

1.) What was the first "major league" investment post house hacking you completed? (SFR, Wholesaling, Multiplex, a flip, BRRRR, syndication!)

2.) How did you get it done? (own money, hard money, partnership, raising private money)

3.) House Hacking, in my opinion, is the single best way to reach FI (or at least start), but many people are afraid to do it as there's a lot of misconceptions about this way of investing. I was told "that's crazy" or "I could never give up my privacy" even "that's the lazy way of investing" (to which I say, "work smarter not harder"?) and personally I have yet to experiance a down side that would outweigh what I've gained... so for the fun of it, to those who have house hacked and do have something to share when they thought "I'm crazy", "I can't believe I did this" please share!

4.) Please leave with any advice to the people out there considering dipping their toe into investing by house hacking.

My advise is should you take this leap, try your best to avoid your tenants discovering you're the owner. When they know you're the decision maker you'll get every request under the sun and it's a lot easier to just be the messenger and blame the "Owner" for denying the request. 

Best!

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Andrew SyriosPro Member
Moderator
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
5y

I haven't house hacked but the friends I have who've done it usually just go onto the next house hack. Indeed, some turn it into a lifestyle. I got one who's nearing ten!

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  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    5y

    I haven't house hacked but the friends I have who've done it usually just go onto the next house hack. Indeed, some turn it into a lifestyle. I got one who's nearing ten!

  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    @Cody McVay - I am in a similar situation to you. I completed by first house hack in December 2020 and am looking to complete another house hack. The thing holding me back right now is having to live in the property for a year due to it being a FHA loan. I am just as eager as you to complete another house hack but am being held back by financing options.

    Regarding what I have done after house hacking, I invested in a 132 unit apartment complex syndication which should provide about a 14% cash on cash return. I funded this via a HELOC on my first primary residence prior to house hacking.

    I am at a crossroads myself. I want to go 100% into real estate investing and get my next property but need to pay down some of this debt that I borrowed to purchase the last two deals. I want to buy buy buy, but don't want to overleverage myself at the same time. I'd love to hear peoples thoughts on what a good level of leverage should be.

    Regarding best practices for house hacking, having a strong screening / rental criteria and sticking to it is key to success. I would rather let my unit sit vacant for a few months if it means getting a qualified tenant or filling it right away with an unqualified tenant. Being paid consistently, on time, and keeping the unit is a good condition should be your top priority. It'll save you countless headaches down the road. 

  • Rental Property Investor · Columbus, OH · Member since 2017 · 31 posts · 35 votes
    5y
    Originally posted by @Andrew Syrios:

    I haven't house hacked but the friends I have who've done it usually just go onto the next house hack. Indeed, some turn it into a lifestyle. I got one who's nearing ten!

    Rinse and repeat! 

  • Rental Property Investor · Columbus, OH · Member since 2017 · 31 posts · 35 votes
    5y
    Originally posted by @Andrew Freed:

    @Cody McVay - I am in a similar situation to you. I completed by first house hack in December 2020 and am looking to complete another house hack. The thing holding me back right now is having to live in the property for a year due to it being a FHA loan. I am just as eager as you to complete another house hack but am being held back by financing options.

    Regarding what I have done after house hacking, I invested in a 132 unit apartment complex syndication which should provide about a 14% cash on cash return. I funded this via a HELOC on my first primary residence prior to house hacking.

    I am at a crossroads myself. I want to go 100% into real estate investing and get my next property but need to pay down some of this debt that I borrowed to purchase the last two deals. I want to buy buy buy, but don't want to overleverage myself at the same time. I'd love to hear peoples thoughts on what a good level of leverage should be.

    Regarding best practices for house hacking, having a strong screening / rental criteria and sticking to it is key to success. I would rather let my unit sit vacant for a few months if it means getting a qualified tenant or filling it right away with an unqualified tenant. Being paid consistently, on time, and keeping the unit is a good condition should be your top priority. It'll save you countless headaches down the road. 

     Going from HH to a 132 unit is impressive! Were you the GP or LP on that deal? 

    I agree! Thorough tenant screening and having solid rental criteria will make or break a landlord, great advice!

  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    @Cody McVay - Limited partner, only provided cash but was a really good learning experience. Also when you are borrowing at a 2.25% rate to get a 14% cash on cash return, it makes total sense lol. 

  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    5y
    Originally posted by @Cody McVay:
    Originally posted by @Andrew Syrios:

    I haven't house hacked but the friends I have who've done it usually just go onto the next house hack. Indeed, some turn it into a lifestyle. I got one who's nearing ten!

    Rinse and repeat! 

    Amen!

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