What’s your House Hack Story?

[Jacorion Williams]

Hey Bp members, specifically house hackers, whats your story? 

I’m currently very interested in investing in real estate long term and would like to get started with house hacking soon, hopefully by the end of the year. 

Currently 22 turning 23 next month and my goal is to house hack with my partner for the next 10 years before venturing out. 

So far, I’ve been learning via reading and listening to podcasts daily for the past few months along with saving majority of my income from work to go towards my first future down payment. 

My question is for anyone that has house hack or is planning to, what’s your story? 

What was your motive for house hacking? 

Did you have any troubles or any crazy stories?

What’s are some things a newbie investor like me should watch out for or avoid followed by what should we prepare ourselves for? 

Lastly, if there was anything you could do differently, what would that be? 

Thanks again! 

[Andrew Bosco]

Hey there! I am on my second house hack. Completely different stories. 

Househack 1: Bought in 2022 (Jan). 430K for a 2 family. Complete POS and bad tenants. FHA buy. House was barely passable. 3.0% interest rate. Overpaid and put like 70K into it. Looking back - terrible investment. All this said, I GOT STARTED! That is all it took for me to propel my real estate career. Gutted the entire building and left the exterior as is. I rented the top floor for 2200 per month for a 2 bed/1bath and the going rate for 2 beds was around 1800. I made my units A quality.

My tenant was paying 2200 and my mortgage was 2700 per month. My wife (girlfriend at the time) paid me 1500 in rent every month to live there (with me). We used that money over time and saved up. Bought out second house hack. Completely different place 1 year later. Also, my first house hack was a bad buy imo, but now with both units rented - my cash flow is 400 bucks per door, which is sweet. 

Househack #2: 5% down. 3 family. Completely turn key. FSBO. It was an illegal 3 family (legal single family with an in law) with a random other unit. Sat on the market. I made the owner a lower offer and asked for 25K back in credits. I am also an agent. I paid 600K (appraised at 700K) for this place and only brought 8k to closing with me personally since I also got a commission. The entire building was vacant and turn key. We are in a beautiful rural area. 5+ year plan to stay here. Everything is up to code now.

Motive: build financial independence. I looked at each house hack as a future payment to myself. 

Crazy stories; househack 1: peeling layers back and ended up gutting place. Tenants were respectful, but left in a angry way. Nothing to absurd. 

advice: just get involved, but make the deal work. On your first house hack - just make sure you pay less on a mortgage than you would rent. 

[John Warren]

@Jacorion Williams me and my wife tried to house hack back in 2012, 2013, 2014 and 2015. We couldn't make any deals work (we were so ignorant), and it set us back many years because we didn't buy anything. If I could do it all over again, I would have bought a three flat almost right out of the gate. We were looking at buildings in Berwyn here in the Chicago suburbs for 220k that are now worth 450k easily. 

[Brandon States]

@Jacorion Williams

Started by purchasing a duplex, lived in one side and did Airbnb on the other side. Now we're up to 12 units.

[Matthew Kwan]

HI Jacorion,

Glad you are starting off your journey

You can always start off by house hacking meaning you live in one UNIT or ROOM and renting out the other vacant units/rooms to offset your monthly mortgage payment.

There are several ways to run and make sure you are maximizing your rental income while keeping your living expense as low as possible. Try looking into zillow/Redfin and see what your potential rents you can get near the neighborhood by filtering the bedrooms/bathrooms of the intentional property that you are planning to buy. This will allow you give a reference point on how much potential rent you can receive. (Max vacated rents - your monthly mortgage payment) = +/- net cashflow. Happy to connect and assist you in your real estate investing journey.

Happy to connect if you are interested to expand your portfolio

@Albert Bui @Carlos Valencia

[Travis Timmons]

Thanks for the response @ChatGPT, I mean @Matthew Kwan

We were a live in flip family. The first one was ROUGH. We lived in a job site, full of dust, walking around in flip flops as we slowly renovated our house room by room over the course of 2-3 years. The neighborhood was great...that's probably why my wife came along for the ride. It was likely the only way we got into that neighborhood. She's got some grit too and saw the big picture. That construction also coincided with the birth of our first child. By the time we finished and had an amazing house, we sold it and bought another one. 

We then stayed in that one (though it wasn't bad - just needed some cosmetic updates) for 7 years, just moved out, kept it as a long term rental, and moved into another major fixer in our STR market across the country near Acadia National Park in Maine. We're going to slowly fix this one up again. The house hack portion of this story will be leaving our house for 6-8 weeks in peak season to rent it on airbnb/vrbo. This property is also on 5 acres and can be parceled off into 3 total lots...we're still working through what we are going to do there but the first and best idea would be to build an A frame or two to use as a STR.

Whew! Thanks if you made it this far and sorry for the length. Getting creative about using your primary as a chess piece for your investment journey is just fun and probably the best way to hit the fast forward button on your investment journey (so long as your reserves and marriage are strong enough to handle it).

[Jacorion Williams]

Quote from @Andrew Bosco:

Hey there! I am on my second house hack. Completely different stories. 

Househack 1: Bought in 2022 (Jan). 430K for a 2 family. Complete POS and bad tenants. FHA buy. House was barely passable. 3.0% interest rate. Overpaid and put like 70K into it. Looking back - terrible investment. All this said, I GOT STARTED! That is all it took for me to propel my real estate career. Gutted the entire building and left the exterior as is. I rented the top floor for 2200 per month for a 2 bed/1bath and the going rate for 2 beds was around 1800. I made my units A quality.

My tenant was paying 2200 and my mortgage was 2700 per month. My wife (girlfriend at the time) paid me 1500 in rent every month to live there (with me). We used that money over time and saved up. Bought out second house hack. Completely different place 1 year later. Also, my first house hack was a bad buy imo, but now with both units rented - my cash flow is 400 bucks per door, which is sweet. 

Househack #2: 5% down. 3 family. Completely turn key. FSBO. It was an illegal 3 family (legal single family with an in law) with a random other unit. Sat on the market. I made the owner a lower offer and asked for 25K back in credits. I am also an agent. I paid 600K (appraised at 700K) for this place and only brought 8k to closing with me personally since I also got a commission. The entire building was vacant and turn key. We are in a beautiful rural area. 5+ year plan to stay here. Everything is up to code now.

Motive: build financial independence. I looked at each house hack as a future payment to myself. 

Crazy stories; househack 1: peeling layers back and ended up gutting place. Tenants were respectful, but left in a angry way. Nothing to absurd. 

advice: just get involved, but make the deal work. On your first house hack - just make sure you pay less on a mortgage than you would rent. 

Wow it kinda sucks that the first house hack was the way it was, but glad to see that didn't stop you from continuing to the next! I’m also starting this with my girlfriend in hopes that we can too build financial independence in the future.  
Based off your first house hack, would you say that the deal you took was worth it in the end, maybe based off the experience or could you have found better? 
Also, what are some things you have learned since you started on both properties that may have been eye opening and really valuable? 

[Jacorion Williams]

Quote from @John Warren:

@Jacorion Williams me and my wife tried to house hack back in 2012, 2013, 2014 and 2015. We couldn't make any deals work (we were so ignorant), and it set us back many years because we didn't buy anything. If I could do it all over again, I would have bought a three flat almost right out of the gate. We were looking at buildings in Berwyn here in the Chicago suburbs for 220k that are now worth 450k easily. 

 So your take away is to not be hesitant and to just go for it even if the deal may not pencil out?  

Also, how have things been since then? Were you able to try to house hack after that period or did you go for a different approach? 

[Jacorion Williams]

Quote from @Brandon States:

@Jacorion Williams

Started by purchasing a duplex, lived in one side and did Airbnb on the other side. Now we're up to 12 units.

Nice! 
Ideally i’d like to do something similar with Airbnb but that wouldn't be until I’m in more of a vacation like area. 
If you don’t mind me asking, how long did it take for you to make it up to 12 units? 

[Jacorion Williams]

Quote from @Travis Timmons:

Thanks for the response @ChatGPT, I mean @Matthew Kwan

We were a live in flip family. The first one was ROUGH. We lived in a job site, full of dust, walking around in flip flops as we slowly renovated our house room by room over the course of 2-3 years. The neighborhood was great...that's probably why my wife came along for the ride. It was likely the only way we got into that neighborhood. She's got some grit too and saw the big picture. That construction also coincided with the birth of our first child. By the time we finished and had an amazing house, we sold it and bought another one. 

We then stayed in that one (though it wasn't bad - just needed some cosmetic updates) for 7 years, just moved out, kept it as a long term rental, and moved into another major fixer in our STR market across the country near Acadia National Park in Maine. We're going to slowly fix this one up again. The house hack portion of this story will be leaving our house for 6-8 weeks in peak season to rent it on airbnb/vrbo. This property is also on 5 acres and can be parceled off into 3 total lots...we're still working through what we are going to do there but the first and best idea would be to build an A frame or two to use as a STR.

Whew! Thanks if you made it this far and sorry for the length. Getting creative about using your primary as a chess piece for your investment journey is just fun and probably the best way to hit the fast forward button on your investment journey (so long as your reserves and marriage are strong enough to handle it).

Honestly very smart way to play out using your main property as a source of income. I kinda have an idea of how live in flips work but seeing that your were able to create ways to rent out parts of the property from just fixing up the house and renting out the rooms is pretty cool! 

With rent by the room, how were you able to find good tenants to move in? 

Also, how has using your primary property as an Airbnb been working for you? 

[Patrick McCann]

Currently in my first house hack, a duplex I purchased in December 2022 for 444k with an 3.5% FHA, the property was in just good enough condition to qualify. When we moved in we were using the down stairs units kitchen and bathroom and living upstairs because the appliances upstairs weren't really usable and the shower had cracks. I've been rehabbing it myself since day 1. Focused on getting the rental unit finished first and did that in 2 months, have had it leased for $2300 since. Slowly finishing our unit, I gutted our kitchen and totally re did it, house is 150+ years old so I've have to do many repairs to the plaster walls, still a bathroom to gut and exterior work to do. Biggest problem I've faced is running out of money and having to save again to continue rehabbing, but duplex's in my area are now trading between 575-675k so once work is completed I expect to have 200k+ in equity. Biggest regret, not starting sooner! I waited till 29 when I knew my whole adult life it was something I wanted to do but always thought I needed more money saved or that I couldn't afford it when realistically I could've done it several years prior at a much lower price and interest rate as well. I didn't actually start researching about real estate investing till after I already started looking at properties.

[Steve Vaughan]

We've been very happy in our 'luxury' househack for 17 years so far.  'Luxury' because it's in an area of SFRs and the MIL apt in the lower quarter of the house isn't noticed that much. 

We would not have been able to relax (retire sounds so final) early without our housing and utility costs being completely covered as they are.  We also wouldn't have been able to relax early if we were in the hospitality business bnb-ing or midterm renting it out. Those are a lot of work. 

A regret I and many other Gen Z parents I know have is that we didn't think of buying land to build a compound for our young adult kids and their friends.  I will probably still do it.  The boys anyway just need a few tiny or mobile homes with a couple shops they can work on their cars, trucks and motorbikes.  Try to assist them with some independence in this world of insanely high rents.   

[Jacorion Williams]

Quote from @Patrick McCann:

Currently in my first house hack, a duplex I purchased in December 2022 for 444k with an 3.5% FHA, the property was in just good enough condition to qualify. When we moved in we were using the down stairs units kitchen and bathroom and living upstairs because the appliances upstairs weren't really usable and the shower had cracks. I've been rehabbing it myself since day 1. Focused on getting the rental unit finished first and did that in 2 months, have had it leased for $2300 since. Slowly finishing our unit, I gutted our kitchen and totally re did it, house is 150+ years old so I've have to do many repairs to the plaster walls, still a bathroom to gut and exterior work to do. Biggest problem I've faced is running out of money and having to save again to continue rehabbing, but duplex's in my area are now trading between 575-675k so once work is completed I expect to have 200k+ in equity. Biggest regret, not starting sooner! I waited till 29 when I knew my whole adult life it was something I wanted to do but always thought I needed more money saved or that I couldn't afford it when realistically I could've done it several years prior at a much lower price and interest rate as well. I didn't actually start researching about real estate investing till after I already started looking at properties.

Well better late than never! On the bright side you were able to add in equity! 
How long did it take since purchasing the property with having to continuously rehab at the same time? 

[Jacorion Williams]

Quote from @Steve Vaughan:

We've been very happy in our 'luxury' househack for 17 years so far.  'Luxury' because it's in an area of SFRs and the MIL apt in the lower quarter of the house isn't noticed that much. 

We would not have been able to relax (retire sounds so final) early without our housing and utility costs being completely covered as they are.  We also wouldn't have been able to relax early if we were in the hospitality business bnb-ing or midterm renting it out. Those are a lot of work. 

A regret I and many other Gen Z parents I know have is that we didn't think of buying land to build a compound for our young adult kids and their friends.  I will probably still do it.  The boys anyway just need a few tiny or mobile homes with a couple shops they can work on their cars, trucks and motorbikes.  Try to assist them with some independence in this world of insanely high rents.   

Congrats on those 17 years in building a relaxing life for yourself! 
Are you recommending that at some point it would be wise to purchase land to add property to for future children in a way to support them? If so would that be leaning towards residential properties or commercial like with some type of business like the shops you mentioned? 

[Steve Vaughan]

Quote from @Jacorion Williams:

Quote from @Steve Vaughan:

We've been very happy in our 'luxury' househack for 17 years so far.  'Luxury' because it's in an area of SFRs and the MIL apt in the lower quarter of the house isn't noticed that much. 

We would not have been able to relax (retire sounds so final) early without our housing and utility costs being completely covered as they are.  We also wouldn't have been able to relax early if we were in the hospitality business bnb-ing or midterm renting it out. Those are a lot of work. 

A regret I and many other Gen Z parents I know have is that we didn't think of buying land to build a compound for our young adult kids and their friends.  I will probably still do it.  The boys anyway just need a few tiny or mobile homes with a couple shops they can work on their cars, trucks and motorbikes.  Try to assist them with some independence in this world of insanely high rents.   

Congrats on those 17 years in building a relaxing life for yourself! 
Are you recommending that at some point it would be wise to purchase land to add property to for future children in a way to support them? If so would that be leaning towards residential properties or commercial like with some type of business like the shops you mentioned? 

Oh yep, just land with little dwellings and work shop space.  Wood working,  working on cars, etc.  My boys and their friends build stuff and work on their cars, trucks and motorbikes.   

[Landon Mizuguchi]

Commenting to follow

[Jacorion Williams]

Quote from @Steve Vaughan:

Quote from @Jacorion Williams:

Quote from @Steve Vaughan:

We've been very happy in our 'luxury' househack for 17 years so far.  'Luxury' because it's in an area of SFRs and the MIL apt in the lower quarter of the house isn't noticed that much. 

We would not have been able to relax (retire sounds so final) early without our housing and utility costs being completely covered as they are.  We also wouldn't have been able to relax early if we were in the hospitality business bnb-ing or midterm renting it out. Those are a lot of work. 

A regret I and many other Gen Z parents I know have is that we didn't think of buying land to build a compound for our young adult kids and their friends.  I will probably still do it.  The boys anyway just need a few tiny or mobile homes with a couple shops they can work on their cars, trucks and motorbikes.  Try to assist them with some independence in this world of insanely high rents.   

Congrats on those 17 years in building a relaxing life for yourself! 
Are you recommending that at some point it would be wise to purchase land to add property to for future children in a way to support them? If so would that be leaning towards residential properties or commercial like with some type of business like the shops you mentioned? 

Oh yep, just land with little dwellings and work shop space.  Wood working,  working on cars, etc.  My boys and their friends build stuff and work on their cars, trucks and motorbikes.   

That’s pretty cool, a good way to stay in real estate while having the ability to support your kids and their skills/hobbies.

[Griffin Malcolm]

Did my first one last May. Paid 180k. Appraised for 230k. Did a home equity loan to pay for the water & sewer lines, removing knob and tube, some new flooring and some plumbing fixes. 

I rent 3 of the bedrooms to my college boys and I break even on the mortgage. Works well for now, but I'm getting a little sick of playing jenga with the fridge between the four of us, so my next one will be a duplex. 

Biggest lesson learned is don't be afraid of rehab work. It's how you force equity and make connections. My plumber at my primary residence is now my GC on my first BRRRR that's being finished this week. I also learned that my forte is not doing handyman stuff myself. Takes me so much longer and it doesn't look great. I'm better off buying more of a P.O.S. and hiring professionals to rehab it for me in a BRRRR style

[John Warren]

@Jacorion Williams I always tell folks in your situation about the opportunity I missed by being too conservative and hesitant. I didn't know what I didn't know, and I missed out. Most folks struggle to get over the hump and never invest because every property comes with an element of risk. 

Since that time, I have been involved in a few transactions and am a principle on 173 apartments in the Chicago area. I have done 5 deals on my own as well and am currently selling my first (and only) residential property to do a 1031 exchange for a larger building in Berwyn where it all started for me. 

I never got to house hack, but I have done two live in flips in the Riverside area once my kids got into school. That has helped tremendously over the years as I built up the seed capital to get rolling. 

[Jonathan Klemm]

Wonderful question to stimulate conversation @Jacorion Williams!

My first house hack was when I was 27 years old in Louisville, KY.  I was actually TOO CHEAP to pay rent so just figured I should buy a place. Ended up that I did a House hack, rent by the room, and BRRRR all in one swoop before I even knew what they meant.

I lived in that property for 3 years, so I did NOT PAY ANY CAPITAL GAINS when I sold and bought a 2 unit and a vacant lot in Bucktown (Chicago neighborhood).  Did a gut renovation on the 2 unit, refinanced to clear the lot of lien, and then used the equity in the lot to BUILD A GROUND UP SINGLE FAMILY house that sold for $1.1M.

Then did a 1031 EXCHANGE for a 19 unit building in Cicero...

Now building a Chicago General Contracting business because I love renovating and helping other real estate investors reach financial independence!

Pretty much accidently followed Brandon Turns stack method!

[Jacorion Williams]

Quote from @Griffin Malcolm:

Did my first one last May. Paid 180k. Appraised for 230k. Did a home equity loan to pay for the water & sewer lines, removing knob and tube, some new flooring and some plumbing fixes. 

I rent 3 of the bedrooms to my college boys and I break even on the mortgage. Works well for now, but I'm getting a little sick of playing jenga with the fridge between the four of us, so my next one will be a duplex. 

Biggest lesson learned is don't be afraid of rehab work. It's how you force equity and make connections. My plumber at my primary residence is now my GC on my first BRRRR that's being finished this week. I also learned that my forte is not doing handyman stuff myself. Takes me so much longer and it doesn't look great. I'm better off buying more of a P.O.S. and hiring professionals to rehab it for me in a BRRRR style

 Nice 50k added on the newly appraised property! 

One thing I do want to avoid is the shared living space so I'm aiming for a MFR same as you if possible.

I also never thought about building connections that way but makes a lot of sense! Was keeping it tunnel vision and believing the only way was purely from going to seminars and meet ups but didn’t think about building them from working on the house and hiring. 

Thanks for that will keep it in mind for sure!

[Patrick McCann]

Quote from @Jacorion Williams:

Quote from @Patrick McCann:

Currently in my first house hack, a duplex I purchased in December 2022 for 444k with an 3.5% FHA, the property was in just good enough condition to qualify. When we moved in we were using the down stairs units kitchen and bathroom and living upstairs because the appliances upstairs weren't really usable and the shower had cracks. I've been rehabbing it myself since day 1. Focused on getting the rental unit finished first and did that in 2 months, have had it leased for $2300 since. Slowly finishing our unit, I gutted our kitchen and totally re did it, house is 150+ years old so I've have to do many repairs to the plaster walls, still a bathroom to gut and exterior work to do. Biggest problem I've faced is running out of money and having to save again to continue rehabbing, but duplex's in my area are now trading between 575-675k so once work is completed I expect to have 200k+ in equity. Biggest regret, not starting sooner! I waited till 29 when I knew my whole adult life it was something I wanted to do but always thought I needed more money saved or that I couldn't afford it when realistically I could've done it several years prior at a much lower price and interest rate as well. I didn't actually start researching about real estate investing till after I already started looking at properties.

Well better late than never! On the bright side you were able to add in equity! 
How long did it take since purchasing the property with having to continuously rehab at the same time? 

 Still going haha. Still have a bathroom to gut, walls and stairway to be sanded/painted, exterior trim to be replaced and the whole exterior painted.

[Michael Orlando]

I just turned 28 I bought my duplex 4 years ago. I was able to save up a lot of money to buy it. I didn’t have a great income. I thought it would be easy.  I thought just hiring a property manager would make it really easy.  A tenant and the property management company walked all over me and costed me thousands and thousands of dollars. Since then I got into the trades actually learned how to manage a property/tenants. I found out if you need to pay someone every time something breaks you’re not going to make money.  I now am earning pretty good money and know how to do a lot of repairs myself. I have a lot more confidence when I screen for tenants. 

Things I wish I knew Are take your time getting the right tenant. It’s a lot better to have it vacant a little longer than get a bad tenant that causes headaches. I would also look into the trades if you’re not already in them. If you learn to fix houses you will never run out of work or money. I would also say if you don’t make a great income work on that before making any moves on real estate. Information online makes it seem like it’s no big deal if something breaks because you have paying tenants. It’s not always that simple.

[Michael Smythe]

Did a duplex, bought with FHA 203(k) - which allows repair costs to be included in purchase mortgage.

Wasn't easy, as had to get bids from licensed contractors, even though I planned to do most everything myself.

Worked out well, refinanced out of the FHA into NOO loan and then bought another duplex with FHA and hacked that one.

[Jacorion Williams]

Quote from @John Warren:

@Jacorion Williams I always tell folks in your situation about the opportunity I missed by being too conservative and hesitant. I didn't know what I didn't know, and I missed out. Most folks struggle to get over the hump and never invest because every property comes with an element of risk. 

Since that time, I have been involved in a few transactions and am a principle on 173 apartments in the Chicago area. I have done 5 deals on my own as well and am currently selling my first (and only) residential property to do a 1031 exchange for a larger building in Berwyn where it all started for me. 

I never got to house hack, but I have done two live in flips in the Riverside area once my kids got into school. That has helped tremendously over the years as I built up the seed capital to get rolling. 

Nice, so it’s best to not be hesitant and go for the opportunity when available even if there could be risk?   
Also, as principal for those apartments, would that mean you are managing and watching over them? If so what are the biggest challenges you face doing that?

[Jacorion Williams]

Quote from @Jonathan Klemm:

Wonderful question to stimulate conversation @Jacorion Williams!

My first house hack was when I was 27 years old in Louisville, KY.  I was actually TOO CHEAP to pay rent so just figured I should buy a place. Ended up that I did a House hack, rent by the room, and BRRRR all in one swoop before I even knew what they meant.

I lived in that property for 3 years, so I did NOT PAY ANY CAPITAL GAINS when I sold and bought a 2 unit and a vacant lot in Bucktown (Chicago neighborhood).  Did a gut renovation on the 2 unit, refinanced to clear the lot of lien, and then used the equity in the lot to BUILD A GROUND UP SINGLE FAMILY house that sold for $1.1M.

Then did a 1031 EXCHANGE for a 19 unit building in Cicero...

Now building a Chicago General Contracting business because I love renovating and helping other real estate investors reach financial independence!

Pretty much accidently followed Brandon Turns stack method!

Thanks!
You really got the ball rolling after that first property! 
Were you able to create that amount of equity in the ground up build right at the finish of it or did it take some time after it was done? 
Also, do you currently live in the 19 unit you got from the 1031 exchange or just own it in your portfolio?