House Hackers: What unexpected issue(s) did you have to deal with when starting out?

Question

I am looking to purchase a small multifamily for my first house hack in RVA early 2025. I have read many books and articles on the subject, but I'd like to hear some perspectives from others who have already started their investment journey: when you thought you were all prepared and put your plans into action, what unexpected and/or difficult issue(s) came up? Did anything throw you off?

Many thanks to anyone who can share their experiences!

Vitaliy Volpov · Answer

Hey @Joshua Smith

What was the unexpected issue in my first house hack? Fleas in the carpets on the day of the closing! 🤦‍♂️

Quick story: In 2011, after several months of searching, I found a decent, brick side-by-side duplex in a B+ neighborhood with a good school district. At the time, both units were occupeid with month-to-month tenants who had lived there for 9+ years each. The tenants weren't particularly clean, their rents were about 30% below market, and they had a bunch of cats. They also had a bunch of stuff in the side yard.

Needless to say, in order for me to get the owner-occupied financing, I needed at least one of the units vacant. I was not thrilled about either of the tenants that were there. While they seemed nice enough during the walk throughs, I could sense that they were not going to be particularly happy to have a new landlord coming into the picture and kicking one of them out.

We negotiated with the seller and eventually came to an agreement on a price and also worked into the deal that he was going to sell the property to me vacant. We were under contract for a couple of months while we got through the various contingency periods (attorney approval, inspections, appraisal) and while the tenants were given a sufficient amount of time to move out.

On the morning of the closing, I met a contractor at the property to do the final walk through. We confirmed that the tenants had moved out and the place was left in decent shape. There weren't much that the tenants left behind. The apartments were going to need new carpets (the old ones were very dirty and worn, which is not unusual), painting throughout, and a thorough cleaning.

As we walked out the front door and approached our cars, the contractor looked down and noticed that he had multiple black fleas on his pant legs. He immediately jumped and started swiping them off himself with his hands, yelping like a little girl! I would have found his reaction amusing had I not had flees on me as well.

Apparently, they were living and feeding on the tenant's cats while the tenants were in the building. But, once the tenants moved, some of the fleas must have stayed behind on the carpets.

My contractor and I were able to shake all the fleas off ourselves before we got back in our cars and I was also able to kill one. I put it inside of a tissue and brought it with me to the closing.

I then laid the napkin on the table and opened it up for everyone to see. Naturally, everybody looked at me like "what the hell is this?" I told them that this is what's in the carpets at the property right now and I said we're not closing today unless the seller gives us a credit. He wasn't too happy about the situation, but it's kind of hard to argue with the visual evidence sitting on the table right in front of him.

He gave us a credit and we closed. I then had the place "bombed" and treated before and after we removed all of the carpets and pads in both apartments. I then went ahead with the light remodel as planned and my wife and I moved into one of the units. She was pretty paranoid about the fleas for a little while after we moved in, but it all worked out in the end. I can share dozens of other stories of various real estate related "surprises" and "adventures" that I have been a part of over the last 13 years as I worked to grow my portfolio from that one duplex to just over 160 rental units today, but I think this post is long enough already!  The moral of the story is, with real estate, there are many things that can happen completely unexpectedly. You just have to be flexible enough and willing enough to deal with them as they come and not get discouraged or let relatively small setbacks derail your progress.

Good luck with everything! Feel free to DM me and connect if you have any other questions about house hacking and real estate investing in general. I'm happy to share!

Vitaliy

Noah Bacon · Answer

When you buy, make sure to have at least 3 months of reserves for an emergency fund.

I have owned one of my properties since 2021, and the biggest cost is turnover. Tenants not paying on time is a very unexpected reality that I would prepare for as well, and having an emergency fund out the gate will mitigate a lot of your financial stress upfront.

Benjamin Carver · Answer

We're doing a live in flip turned house hack. With a flip plenty of unexpected things happen. Pipes were pretty full already and by the time we got in there they clogged up and had to call a plumber to fix for $700 almost right away. Roof appeared in great shape and was reported 3-5 years old, ended up being 16+ years old and needing replaced. We wanted to do LVP throughout the house and the kitchen and bathrooms had an extra layer of plywood to raise its height so we had to manually crowbar it out, which took days and a lot of work.

Aside from the flip, we didn't expect the sellers too keep changing their minds on closing date. We didn't expect the fact that insurance should cover short term rentals but raises a red flag for lending during the 30-60 day period after closing where they make sure you're not using the home as a rental. So we had to take the risk or choose a normal insurance during the period and switch over after our loan was resold.

Another thing was how expensive tools and equipment were for the rehab and just to have around. Same goes for furnishing; many spend 10s of thousands on furnishing if doing bnb like we are. So we are having to get creative with fb marketplace and stuff.

Even stuff as simple as changing out locks to smart locks can be annoying and difficult if you're as non-technical and non-handy as I am!

But it's all worth it in the end.

Daniel McDonald · Answer

I am on my second house hack just north of Boston. I can't say anything has really shocked me seeing as the houses are old around my and I FIRMLY believe that it's not a matter of IF something happens it's a matter of WHEN. Not trying to be negative but just make sure you don't put every cent you have into when you buy the property. I went into about 20k worth of debt within my first few months house hacking. Not because I was just throwing money around but because I spent more on renovations than I thought, and we had a basement issue that I ignored during the inspection. However, this isn't to scare you away, because I was house hacking my expenses dropped substantially and I was able to pay that 20k back pretty quickly. And seeing it was on a no interest credit card I think of it as just borrowing money, not going into bad debt.

Byron Valles · Answer

Parking!

I've done two house-hacks and parking has been an issue in both despite both properties being on a corner lot.

In one case I converted the detached garage of a SFH into a legal ADU essentially converting it into a duplex. Well, that meant two families were sharing a two-car driveway. Luckily I was able to convert a portion of the front lawn into an additional parking for not a lot of money, but I had initially failed to account for this inconvenience - lesson learned.

Vitaliy Volpov · Answer

Agree 100%, Andrew! So many new rental property owners/"investors" do this.  I also see agents do this a lot! (I own a real estate brokerage so we deal with agents all the time).  They put a property up on the market, put the taxes, insurance, and utilities on there, subtract an estimate for the mortgage and then say this property is a "cash cow!" or that it has $xxxxx net operating income... No, it doesn't. 🤦‍♂️

Julien Jeannot · Answer

@Joshua Smith

One is never prepared enough, don't let that slow you down. I started before BP and the ridiculous amount of books and podcast we have these days. In a sense, it allowed me to jump in and figure things out along the way.

What was unexpected: I thought everything I bough I overpaid for, looking back, it was cheap and should I have bought more. Thinking long term is the way to go.

Andrew Freed · Answer

@Joshua Smith - The biggest lessoned I learned is, it's expensive to own real estate. It is imperitive to budget for the phantom expenses such as capex, repair, maintanence, and property management (even if you are self managing). These are real costs that hit your bottom line whether you like it or not.

The biggest mistake I see from new investors is taking the revenue and minusing the mortgage payment and calling that cash flow. If you don't accurately budget for these phantom expenses, you could be thinking your getting a cash flowing asset but in reality, you are getting a property that cost you money each month due to  these unaccounted for phantom expenses.

Benjamin Sulka · Answer

What a story, Vitaliy! Love how you used the flea as physical evidence to get a seller credit

Benjamin Sulka · Answer

Benjamin,

Love that you consider yourself "non-handy" and still jumped into it. Love to see the content you're posting on BiggerPockets!

House Hackers: What unexpected issue(s) did you have to deal with when starting out?

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