REAL House Hacking Numbers

[Anthony Swain]

Hey everyone,

I wanted to share numbers from my wife and I's 1st house hack. I know a-lot of people talk about house hacking, but not always about the numbers. My goal for this post was to give some transparency for anyone that is considering this approach. 

Full Brick Detached Duplex in Optimist Park (4 Bd/2 Ba) 1610 sq feet

PP: $565k                                                                                            

DP: $28k                                                                                              

Closing Costs: $0 ($15k seller credits)                                            

*Used to cover CC & Buy Down Rate

Renovations & Furnishings (MTR/STR): $47k

Cash Invested: $75k

ARV: $675k-$700k



Just a quick aside, I think right now is a great time for an investor, because there are a lot more people on the "side line". I'm willing to bet if rates went down significantly than getting this property under contract would have had even more competition. With rates higher, the seller was more inclined to take less than listing price and was willing to provide additional seller credits. 

Rent                $2,600/month as MTR                           

Vac (5%)         -$130                                                                                                  

Main. (5%)     -$130                                                                                        Insurance  $97

Cap Ex (10%) -$260                                                                                                Taxes $240

Utilities           -$175                                

NOI $1,905

PITI+PMI= $3,846

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

$1,905 - $3,846 = -$1,941      

My wife and I essentially split $1,941/month to live in our duplex in one of our favorite neighborhoods.

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

Well, here is where things get better! IMO every house hacker should include all of these numbers into their overall decision/calculations. 

Cost Per Year to Live: -$23,292

             Amortization: +5,648.46    (aka loan paydown)    

    Appreciation (4%): +$27,200    

                         ROI= $9,556/$75k= ( 12.7%)

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

Our prior rent was $2,300 for a so-so furnished unit in Charlotte.

Plus, we paid $1,000 per month to maintain our tax home as travel nurses.

Total we paid $3,330 per month as our housing expense.                                                                     

Our housing expense saved is $1,359 or $16,308 per year

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

NROI= ($9,556+$16,308)

                   $75k

NROI= ~34.4%

These numbers will only get better if/when we are able to refinance to a lower rate and more principle pay down.

Any other successful house hackers out there? How are things going for you?

[Anthony Swain]

Let me know if you have any questions or if you're trying to house hack in Charlotte, then let's connect! 

[Kai Kopsch]

@Anthony Swain thanks for sharing! nice 1st house hack

[Anthony Swain]

Thank you @Kai Kopsch. I'm glad we took the first step. We're learning and growing for sure!

[Logan Koch]

Congrats on a solid house hack. Goes to show you don't have to get your mortgage covered 100% by the rent from the other unit for it to be a good deal. Especially when you break it down and look at the other levers being pulled to increase the ROI

[Anthony Swain]

@Logan Koch Thank you Logan! Still learning and growing, but wouldn't have even started the journey without taking the leap on a house hack. 

You're right! So many "levers" to be pulled in house hacking to add into the equation. 

You mentioning this made me think about another lever. The equity gains from our renovations in year one. I'll have to add that into my final NROI in another post. 

Take care

-Ant

[Anthony Swain]

If you add in our potential equity gained after renovations, then the NROI skyrockets!

For example, our ARV is $675k, so our initial equity gained would be around $144,148.

NROI= ($9,556+$16,308+$144,148)

                           $75k

NROI= 226%

[Ray Hage]

Excellent house hack! I am a big fan of it and you managed to do without with very little money down! 

I currently live in a house hack and have been doing it for years and have saved a ton of money because of it! Keep hacking, my friend :)

[Anthony Swain]

@Ray Hage Thank you my friend!

That 5% conventional came in clutch! The seller wanted nothing to do with FHA, but we wanted to use leverage so the conventional loan for MF came at perfect time.

instead of $84k or $113k down we only needed $28.5k. 

I hope the house hacking keeps being prosperous for you too 🤝

[Jacob Zivanovich]

Hey Anthony! I liked this post a lot. I saved this post format so that when I get my 1st house hack this year (hopefully!), I'll make a post similar to this. 

I had a question: Under your "Amortization" category, why is considered a + and not a - ? Is this because your Principle Paydown is transferred into equity?

Thanks and congratulations!

[Anthony Swain]

Hey @Jacob Zivanovich,

I’m glad you found it helpful man! My goal was to give a good example for someone else. 

I counted amortization as a plus because I’m highlighting the amount of principle I’m paying down. That principle paydown is your new equity in theory. It may not seem like a lot month to month but over a year it can be a few thousand. After several years, it can be a larger five figure chunk. 

Please reach out if you have any questions! I’m happy to help!

-Ant