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Things I've learned as a house hacker so far...
Hey house hacking peeps,
I wanted to share some of the biggest lessons I've learned so far with my wife and I's duplex house hack.
1) Finding the right property is VERY important for a house hack. In our situation, there were other multi family properties available, but they were either much further from the city, in bad neighborhoods, or very old outdated properties.
IMO location is everything in a house hack. First, you will be living there, so I think it should be a place that you want to live. Second, with a better location it has been much easier to rent and we receive higher rents. Lastly, great locations open your property up to many other opportunities (STR, "MTR", etc.)
2) For your first house hack and for future investments, having a knowledgeable investor friendly team members can make a huge difference. A real estate agent with knowledge of investments, analyzing deals, knowing construction, and having crucial contacts will drastically improve your odds of success. They can connect you with other rockstar team members like lenders, inspectors, contractors, insurance, attorneys, etc.
Where to find these agents?? Here! Or at a local real estate meet-up is another great option.
3) IMO (duplex, triplex, quadplex) are best, butttt in some areas supply is limited. In these markets, you may need to get creative! I think there are many over looked opportunities like mother in law suites, finished basements with walk out, finished garage, or building an ADU, renting to room mates to offset cost, etc. It is still possible without small multi-family.
4) Renovations. If you do them, then make sure you are hiring a vetted professional. Get multiple referrals, quotes, and references. This can help you make the most informed decision. Your rockstar agent will likely be able to steer you in the right direction, but you can always find outside sources too.
There will be unexpected costs that come up, so make sure you give a little cushion in your budgeting for that.
5) Screening- Have a thorough and standardized screening process. It will make your decisions a lot easier and hopefully it will prevent you from having "bad" tenants. Also, this process will allow you to be fair in your selection process.
Ex. Credit score 650 >
Income 3x rent
No prior felonies or evictions
xx
xx
6) Property Management - You can hire a professional and pay an additional 8-15% of your income or self manage. IMO self managing is VERY doable for a house hack or for any of your first handful of properties. The property management software makes it extremely easy and efficient.
AVAIL, STESSA, RENT REDI, BASELANE, TENANT CLOUD, etc. are solid options. Choose one, try it out, and see if it has all the features you want. If it doesn't, move on from the free trial and try the next one.
7) STR/MTR can be a game changer. A little more set-up initially and things to learn, but once you're off and running, then your property can significantly generate more income. I would highly recommend to consider it and include it in your deal analysis for potential properties.
I'm sure I'm missing something, but these were some of my "off the cuff" thoughts on important things I've learned. Does anyone else have any important points that I missed?
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Quote from @Anthony Swain:
Hey house hacking peeps,
I wanted to share some of the biggest lessons I've learned so far with my wife and I's duplex house hack.
1) Finding the right property is VERY important for a house hack. In our situation, there were other multi family properties available, but they were either much further from the city, in bad neighborhoods, or very old outdated properties.
IMO location is everything in a house hack. First, you will be living there, so I think it should be a place that you want to live. Second, with a better location it has been much easier to rent and we receive higher rents. Lastly, great locations open your property up to many other opportunities (STR, "MTR", etc.)
2) For your first house hack and for future investments, having a knowledgeable investor friendly team members can make a huge difference. A real estate agent with knowledge of investments, analyzing deals, knowing construction, and having crucial contacts will drastically improve your odds of success. They can connect you with other rockstar team members like lenders, inspectors, contractors, insurance, attorneys, etc.
Where to find these agents?? Here! Or at a local real estate meet-up is another great option.
3) IMO (duplex, triplex, quadplex) are best, butttt in some areas supply is limited. In these markets, you may need to get creative! I think there are many over looked opportunities like mother in law suites, finished basements with walk out, finished garage, or building an ADU, renting to room mates to offset cost, etc. It is still possible without small multi-family.
4) Renovations. If you do them, then make sure you are hiring a vetted professional. Get multiple referrals, quotes, and references. This can help you make the most informed decision. Your rockstar agent will likely be able to steer you in the right direction, but you can always find outside sources too.
There will be unexpected costs that come up, so make sure you give a little cushion in your budgeting for that.
5) Screening- Have a thorough and standardized screening process. It will make your decisions a lot easier and hopefully it will prevent you from having "bad" tenants. Also, this process will allow you to be fair in your selection process.
Ex. Credit score 650 >
Income 3x rent
No prior felonies or evictions
xx
xx
6) Property Management - You can hire a professional and pay an additional 8-15% of your income or self manage. IMO self managing is VERY doable for a house hack or for any of your first handful of properties. The property management software makes it extremely easy and efficient.
AVAIL, STESSA, RENT REDI, BASELANE, TENANT CLOUD, etc. are solid options. Choose one, try it out, and see if it has all the features you want. If it doesn't, move on from the free trial and try the next one.
7) STR/MTR can be a game changer. A little more set-up initially and things to learn, but once you're off and running, then your property can significantly generate more income. I would highly recommend to consider it and include it in your deal analysis for potential properties.
I'm sure I'm missing something, but these were some of my "off the cuff" thoughts on important things I've learned. Does anyone else have any important points that I missed?
Great summary and I'm glad to hear it's going well! I fully support your recommendation to get started early with some kind of tenant management software. Making the change later can be a hassle. I've used Avail (previous) and Baselane (current)and like features of both, but haven't tried any of the others. I'm curious if yours is a side-by-side duplex or an over/under? I've stayed in STRs that are over/unders and were incredibly noisy so if I was living there full time I think I'd want a side-by-side.
This is great. Do you have any advice or success stories on finding your house hacks thus far? Were they marketed deals? Off-market? If so, what were some of the strategies you used to find and close?
Thanks!
Quote from @Anthony Swain:
Hey house hacking peeps,
I wanted to share some of the biggest lessons I've learned so far with my wife and I's duplex house hack.
1) Finding the right property is VERY important for a house hack. In our situation, there were other multi family properties available, but they were either much further from the city, in bad neighborhoods, or very old outdated properties.
IMO location is everything in a house hack. First, you will be living there, so I think it should be a place that you want to live. Second, with a better location it has been much easier to rent and we receive higher rents. Lastly, great locations open your property up to many other opportunities (STR, "MTR", etc.)
2) For your first house hack and for future investments, having a knowledgeable investor friendly team members can make a huge difference. A real estate agent with knowledge of investments, analyzing deals, knowing construction, and having crucial contacts will drastically improve your odds of success. They can connect you with other rockstar team members like lenders, inspectors, contractors, insurance, attorneys, etc.
Where to find these agents?? Here! Or at a local real estate meet-up is another great option.
3) IMO (duplex, triplex, quadplex) are best, butttt in some areas supply is limited. In these markets, you may need to get creative! I think there are many over looked opportunities like mother in law suites, finished basements with walk out, finished garage, or building an ADU, renting to room mates to offset cost, etc. It is still possible without small multi-family.
4) Renovations. If you do them, then make sure you are hiring a vetted professional. Get multiple referrals, quotes, and references. This can help you make the most informed decision. Your rockstar agent will likely be able to steer you in the right direction, but you can always find outside sources too.
There will be unexpected costs that come up, so make sure you give a little cushion in your budgeting for that.
5) Screening- Have a thorough and standardized screening process. It will make your decisions a lot easier and hopefully it will prevent you from having "bad" tenants. Also, this process will allow you to be fair in your selection process.
Ex. Credit score 650 >
Income 3x rent
No prior felonies or evictions
xx
xx
6) Property Management - You can hire a professional and pay an additional 8-15% of your income or self manage. IMO self managing is VERY doable for a house hack or for any of your first handful of properties. The property management software makes it extremely easy and efficient.
AVAIL, STESSA, RENT REDI, BASELANE, TENANT CLOUD, etc. are solid options. Choose one, try it out, and see if it has all the features you want. If it doesn't, move on from the free trial and try the next one.
7) STR/MTR can be a game changer. A little more set-up initially and things to learn, but once you're off and running, then your property can significantly generate more income. I would highly recommend to consider it and include it in your deal analysis for potential properties.
I'm sure I'm missing something, but these were some of my "off the cuff" thoughts on important things I've learned. Does anyone else have any important points that I missed?
I totally agree @Anthony Swain.
I had a rough road house hacking & doing self management. Things are coming together slowly but I'm learning a lot.
Thanks for sharing
Thanks for taking the time to read through my summary.
Yes, tenant management software will save you time in the long run and allow you to scale without difficulty. It's a lot easier to add properties to an already rock solid process. I use Avail and its made the process seamless IMO. It has a free option or a relatively affordable premium option. Also, you can get referral credits that can make the premium free for months!
It is a side by side duplex. It is only connected by a middle porch. It is basically two separate houses, so that makes it great for privacy. We fenced in the property and added a fence in middle of backyard to split that space too.
I think if you were sharing walls or in same house, then certain quiet hours in lease or noise restrictions can help prevent some issues.
Thank you for commenting Bonnie. Good luck with your investment properties :)
Hey @Alec Bildstein
Thank you my friend!
SEARCH TIPS: We found our house hack duplex on market. It had a high # of days on market and a recent price reduction that triggered us to take a deeper look. I think finding an investor friendly agent can help you spot hidden gems like that and submit offers on your behalf that fit your buy criteria.
I'd look for high days on market, have your agent set up a drip e-mail for listings that meet your criteria, and recent price reductions.
OFF-MARKET: Off-market deals are possible too! If pursuing off-market, then it is crucial to connect with reliable wholesalers or agents that might have some pocket listings. You can pursue off market yourself, but it will take either a lot of time, money or both.
CLOSING: If you have your pre-approval from reliable lenders, then you should be able to close with a favorable loan option. If you don't already have a pre-approval, then connecting with a investor friendly lender is a great start!
If it is off-market, then you'll need to most likely need to raise capital for a cash closing. I'd connect with a vetted hard money lender or gather enough private capital from family/friends.
Please reach out if you have any questions or want to connect Alec. I'm an open book and happy to help!
-Ant
Quote from @Erwin McClain:
I totally agree @Anthony Swain.
I had a rough road house hacking & doing self management. Things are coming together slowly but I'm learning a lot.
Thanks for sharing
Hey Erwin!
Thanks for sharing that. There is a learning curve, but I'm sure you are gaining practical knowledge along the way. Give yourself grace and recognize your progress so far.
Please reach out if you have any questions with self-management. I'm happy to share what I know and has worked for me.
Good luck!
Great post! It sounds like your big takeaway is that if you run your house hack like a business then you will have outsized returns.
I love it!!
@Gregory Schwartz I know you know!
You seem to be one of these Rockstar agents I'm referring to.
Thanks for dropping in man!
Thanks @Anthony Swain. I've seen firsthand the power of a well-executed house hack as I know you have.
#househackforlife haha
@Anthony Swain I’ll add one thing. Depending on your type of house hack you may need to set guidelines/expectations for your tenants.
After 25 years in the bed and breakfast industry living amongst my guests I found that setting expectations and ground rules can be a game changer in keeping the harmonious relationship between you and your tenants.
This can go above and beyond your lease.
This is great advice @Anthony Swain
I totally agree with every word and thank you for sharing this!
Quote from @Anthony Swain:
Hey @Alec Bildstein
Thank you my friend!
SEARCH TIPS: We found our house hack duplex on market. It had a high # of days on market and a recent price reduction that triggered us to take a deeper look. I think finding an investor friendly agent can help you spot hidden gems like that and submit offers on your behalf that fit your buy criteria.
I'd look for high days on market, have your agent set up a drip e-mail for listings that meet your criteria, and recent price reductions.
OFF-MARKET: Off-market deals are possible too! If pursuing off-market, then it is crucial to connect with reliable wholesalers or agents that might have some pocket listings. You can pursue off market yourself, but it will take either a lot of time, money or both.
CLOSING: If you have your pre-approval from reliable lenders, then you should be able to close with a favorable loan option. If you don't already have a pre-approval, then connecting with a investor friendly lender is a great start!
If it is off-market, then you'll need to most likely need to raise capital for a cash closing. I'd connect with a vetted hard money lender or gather enough private capital from family/friends.
Please reach out if you have any questions or want to connect Alec. I'm an open book and happy to help!
-Ant
I really appreciate the feedback and advice Anthony! I shot you a message and would love to connect. Thanks again,
Alec
Great post! My wife an I house hacked and it significantly helped to build our financial runway to invest more!
We self-managed as well and it taught me so much about what it truly looks like to run a real estate business. House Hacking is incredible! Thanks for your helpful insights.
Quote from @Anthony Swain:
Hey house hacking peeps,
I wanted to share some of the biggest lessons I've learned so far with my wife and I's duplex house hack.
1) Finding the right property is VERY important for a house hack. In our situation, there were other multi family properties available, but they were either much further from the city, in bad neighborhoods, or very old outdated properties.IMO location is everything in a house hack. First, you will be living there, so I think it should be a place that you want to live. Second, with a better location it has been much easier to rent and we receive higher rents. Lastly, great locations open your property up to many other opportunities (STR, "MTR", etc.)
2) For your first house hack and for future investments, having a knowledgeable investor friendly team members can make a huge difference. A real estate agent with knowledge of investments, analyzing deals, knowing construction, and having crucial contacts will drastically improve your odds of success. They can connect you with other rockstar team members like lenders, inspectors, contractors, insurance, attorneys, etc.
Where to find these agents?? Here! Or at a local real estate meet-up is another great option.
3) IMO (duplex, triplex, quadplex) are best, butttt in some areas supply is limited. In these markets, you may need to get creative! I think there are many over looked opportunities like mother in law suites, finished basements with walk out, finished garage, or building an ADU, renting to room mates to offset cost, etc. It is still possible without small multi-family.
4) Renovations. If you do them, then make sure you are hiring a vetted professional. Get multiple referrals, quotes, and references. This can help you make the most informed decision. Your rockstar agent will likely be able to steer you in the right direction, but you can always find outside sources too.
There will be unexpected costs that come up, so make sure you give a little cushion in your budgeting for that.
5) Screening- Have a thorough and standardized screening process. It will make your decisions a lot easier and hopefully it will prevent you from having "bad" tenants. Also, this process will allow you to be fair in your selection process.
Ex. Credit score 650 >
Income 3x rent
No prior felonies or evictions
xx
xx
6) Property Management - You can hire a professional and pay an additional 8-15% of your income or self manage. IMO self managing is VERY doable for a house hack or for any of your first handful of properties. The property management software makes it extremely easy and efficient.AVAIL, STESSA, RENT REDI, BASELANE, TENANT CLOUD, etc. are solid options. Choose one, try it out, and see if it has all the features you want. If it doesn't, move on from the free trial and try the next one.
7) STR/MTR can be a game changer. A little more set-up initially and things to learn, but once you're off and running, then your property can significantly generate more income. I would highly recommend to consider it and include it in your deal analysis for potential properties.
I'm sure I'm missing something, but these were some of my "off the cuff" thoughts on important things I've learned. Does anyone else have any important points that I missed?
Hi Anthony! Thanks for sharing some of the biggest lessons you learned during your house hacking journey. It really gave me some good things to consider before jumping into my first house hack (hopefully later this year). I think what intimidates me the most is being the "Big Bad Landlord." Was considering even hiring a property manager to manage the other unit(s) on my behalf but after reading your points I think I'll go all in and manage it myself - like you said, it's more doable if it's a house hack. Would you recommend using property management software for a house hack with only one tenant to worry about?
Hey @Joey Navarro,
Thats awesome to hear man! I'm happy I could provide some value to you.
Great decision for taking the leap to house hacking!
Nobody wants to be the "Big Bad Landlord", but you don't have to be. Be fair. Be honest. Communicate and set expectations. I treat my tenants with the same respect that I would want. Tenants realize this and will more than likely treat your place with more respect.
The property management software makes it all soooo easy and it will set the foundation for you to scale with systems in place. Most of these softwares are very affordable too, especially with limited properties. As a BiggerPockets member you get access to free versions with Stessa & RentRedi. I use Avail and love it! It has state approved leases, background checks, credit reporting, payment processing, maintenance requests, and much more.
Shoot me a DM if you have any other questions or need some more insight into house -hacking. I'm happy to help!
Quote from @Anthony Swain:
Hey house hacking peeps,
I wanted to share some of the biggest lessons I've learned so far with my wife and I's duplex house hack.
1) Finding the right property is VERY important for a house hack. In our situation, there were other multi family properties available, but they were either much further from the city, in bad neighborhoods, or very old outdated properties.
IMO location is everything in a house hack. First, you will be living there, so I think it should be a place that you want to live. Second, with a better location it has been much easier to rent and we receive higher rents. Lastly, great locations open your property up to many other opportunities (STR, "MTR", etc.)
2) For your first house hack and for future investments, having a knowledgeable investor friendly team members can make a huge difference. A real estate agent with knowledge of investments, analyzing deals, knowing construction, and having crucial contacts will drastically improve your odds of success. They can connect you with other rockstar team members like lenders, inspectors, contractors, insurance, attorneys, etc.
Where to find these agents?? Here! Or at a local real estate meet-up is another great option.
3) IMO (duplex, triplex, quadplex) are best, butttt in some areas supply is limited. In these markets, you may need to get creative! I think there are many over looked opportunities like mother in law suites, finished basements with walk out, finished garage, or building an ADU, renting to room mates to offset cost, etc. It is still possible without small multi-family.
4) Renovations. If you do them, then make sure you are hiring a vetted professional. Get multiple referrals, quotes, and references. This can help you make the most informed decision. Your rockstar agent will likely be able to steer you in the right direction, but you can always find outside sources too.
There will be unexpected costs that come up, so make sure you give a little cushion in your budgeting for that.
5) Screening- Have a thorough and standardized screening process. It will make your decisions a lot easier and hopefully it will prevent you from having "bad" tenants. Also, this process will allow you to be fair in your selection process.
Ex. Credit score 650 >
Income 3x rent
No prior felonies or evictions
xx
xx
6) Property Management - You can hire a professional and pay an additional 8-15% of your income or self manage. IMO self managing is VERY doable for a house hack or for any of your first handful of properties. The property management software makes it extremely easy and efficient.
AVAIL, STESSA, RENT REDI, BASELANE, TENANT CLOUD, etc. are solid options. Choose one, try it out, and see if it has all the features you want. If it doesn't, move on from the free trial and try the next one.
7) STR/MTR can be a game changer. A little more set-up initially and things to learn, but once you're off and running, then your property can significantly generate more income. I would highly recommend to consider it and include it in your deal analysis for potential properties.
I'm sure I'm missing something, but these were some of my "off the cuff" thoughts on important things I've learned. Does anyone else have any important points that I missed?
Thank you for sharing; as a young person looking to start house hacking as a way to be a homeowner, landlord, and real estate investor all in one, you have shared some great insights!
Thank you for sharing. These are some great lessons to learn from