Second House Hack Reflection

[Bradley Dosch]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $490,000
Cash invested: $30,000

This was my second house hack and first property in Wa state. I actually never ended up living here. I rent this out by the bedroom and I pay for all utilities, including the best wifi possible and monthly cleaning service. I manage this rent by the room myself using Avail and I rarely go to this house. The tenants seem to like living there and it's my best performing house of the 3 I own so far.

What made you interested in investing in this type of deal?

Finding a large single family house with separate entrances and living areas is a very accessible form of house hacking/investing for many people. It can be tough to cash flow with multi family or traditionally renting a SFH. It is not as much work as a STR and gives people more affordable housing because the rent of a bedroom is much lower than that of a studio apt. This fit my criteria very well. This house has two separate kitchens, laundry units, entrances, and living areas.

How did you find this deal and how did you negotiate it?

I found it on the MLS and asked for $10k seller concession instead of price reduction. I was the only interested buyer for some reason.

How did you finance this deal?

I used 3.5% down FHA and got a 3% rate in exchange for a lender credit. I wanted to and recommend that you use 3-5% down conventional financing for SFH house hacking but my DTI was just barely too high for conventional. FHA allowed for my slightly higher DTI. The MIP is very expensive and never drops off but I can always refi later down the road.

How did you add value to the deal?

Added LVP to the entire upper level, got the tenants the best wifi possible (1.2 GBPS), fully renovated upstairs bathroom, replaced broken sliding glass door, and a handful of other inspection items. I spent about $25k on these renovations. I did none of this work myself.

What was the outcome?

Tenants love living there (I ask them often) and it cash flows $700/month even with the high MIP.

Lessons learned? Challenges?

It's painful to spend money on upgrades upfront especially when it's expensive and you just want to start collecting rent money. But... it's so worth it. The hit of the cost wears off over time and your tenants will really appreciate it. If you focus more on giving people a great place to live, you'll have much more success

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yeah I worked with myself as the agent - great service, couldn't have asked for better. I used Albert Bui as my lender and a handful of tradespeople for the renovations.

[Grant Schroeder]

Quote from @Bradley Dosch:

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $490,000
Cash invested: $30,000

This was my second house hack and first property in Wa state. I actually never ended up living here. I rent this out by the bedroom and I pay for all utilities, including the best wifi possible and monthly cleaning service. I manage this rent by the room myself using Avail and I rarely go to this house. The tenants seem to like living there and it's my best performing house of the 3 I own so far.

What made you interested in investing in this type of deal?

Finding a large single family house with separate entrances and living areas is a very accessible form of house hacking/investing for many people. It can be tough to cash flow with multi family or traditionally renting a SFH. It is not as much work as a STR and gives people more affordable housing because the rent of a bedroom is much lower than that of a studio apt. This fit my criteria very well. This house has two separate kitchens, laundry units, entrances, and living areas.

How did you find this deal and how did you negotiate it?

I found it on the MLS and asked for $10k seller concession instead of price reduction. I was the only interested buyer for some reason.

How did you finance this deal?

I used 3.5% down FHA and got a 3% rate in exchange for a lender credit. I wanted to and recommend that you use 3-5% down conventional financing for SFH house hacking but my DTI was just barely too high for conventional. FHA allowed for my slightly higher DTI. The MIP is very expensive and never drops off but I can always refi later down the road.

How did you add value to the deal?

Added LVP to the entire upper level, got the tenants the best wifi possible (1.2 GBPS), fully renovated upstairs bathroom, replaced broken sliding glass door, and a handful of other inspection items. I spent about $25k on these renovations. I did none of this work myself.

What was the outcome?

Tenants love living there (I ask them often) and it cash flows $700/month even with the high MIP.

Lessons learned? Challenges?

It's painful to spend money on upgrades upfront especially when it's expensive and you just want to start collecting rent money. But... it's so worth it. The hit of the cost wears off over time and your tenants will really appreciate it. If you focus more on giving people a great place to live, you'll have much more success

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yeah I worked with myself as the agent - great service, couldn't have asked for better. I used Albert Bui as my lender and a handful of tradespeople for the renovations.

 @Bradley Dosch so you ended up committing FHA mortgage fraud by not living in the property? That's not something you want to be posting about in a public forum...