All Forum Posts by: Adam Wayne

I have a cleanout story that include, er, soiled marital aids and VHS collections of fat-fetish titles, such as Life in the Fat Lane 2: The Heavy Load. Typically, in those relationships, there's a feeder and there's an eater, the tenant was the eater. I recently saw the feeder walking around my neighborhood, cursed him out loudly on the street. Made my day, really, even though the worthless SOB still owes me $650. I took some satisfaction out of the fact that the little guy was pushing a boy's bicycle with 20-inch wheels up a hill, obviously really going places in his miserable life.

Wow, too funny!! That title cracked me up.

I don’t have any stories yet to add, but I will say that as a project manager for a residential builder and remodeler, it’s amazing to me to know how much time effort and money go into building and repairs on residential construction. I think that this all worked out in the years of free money, but the toll is coming due. If you’re a small guy and you don’t know how to do a lot of this stuff on your own or don’t have massive capital, the price of all the things mentioned in the first post is going to become overwhelming.

2 Votes

Pittsburgh, Pennsylvania

Quote from @Lor Fara:

Hi, just went in escrow for my first flip.

I’ll work with small teams by area as opposed to one GC. Should I ask the contractor quotes for floors, paint, landscape to include materials? Some are saying I should get it. I don’t have a truck so for some stuff not an option.
Also if the receipts are in their name will I be able to deduct them as an expense? thank you.

I work as a project manager for a builder and all of our subs provide their own materials. This is the obvious choice for a number of reasons. Firstly, your subs are going to be way more experienced in their respective fields and will know exactly what products are best and that they’re willing to put their name on. Secondly, they typically receive discounts from their wholesalers, which gives them a bigger slice of the pie while still costing the consumer roughly the same amount of money. Any decent subcontractor is not going to be happy installing whatever you picked up. Lastly, a good subcontractor Will warranty his work, but only if it was material that he provided.

In my experience, the only people willing to install materials that the consumer purchases are low-end contractors/handymen. If you’re really pinching pennies then do what you have to do, but I’ve found that most people who want to buy their own materials are viewed as cheapskates and high quality subs will want to avoid them. Just my two cents from what I observe in the field; you get what you pay for.

0 Votes

Oakland, California

Quote from @Ryan Thomson:

Update! I have officially removed PMI on two of my House Hacks in Colorado Springs. If you purchased more than 2-3 years ago you most likely have enough equity to get rid of PMI. A brief phone call to your mortgage servicer will give you the answers you need to get it removed.

Yep. I just contacted my loan officer and she told me that after 2 years my traditional loan will be eligible to have PMI removed if I reassess at a higher value like you suggested. Great tip, I had never thought about this!

1 Vote

Colorado Springs, Colorado

Bump. Still haven’t received any input on bedrooms per square footage of house. Any input appreciated, thanks!

0 Votes

Quote from @Greta Clav:

No one likes going to the laundromat. That will a negative strike against your property whether you are renting or selling.

I should have specified that the laundry machines are being relocated to the garage

2 Votes

Howdy y’all.

I just bought my first house that I am currently updating and remodeling. It’s not a big house, 2 stories tall 1600sf and 3bed/2.5bath. I’ve been going back and forth in my mind about the best way to handle this investment. I’ve been planning to delete the family room and laundry room and turn them into another bedroom and full bath, so that I would have 4 bed/3.5 bath.

This has been my game plan since I bought the house, but I’m starting to have second thoughts about it. I know that 4 people is a lot for such a small space. Basically the whole house will be bedroom or bathroom with the exception of the good-sized kitchen, large, open, dining room, and decent sized living room.

As of right now I’m planning to rent the two spare bedrooms upstairs and make the 4th bedroom an office, and see how the house hack goes, but I was curious if any of you have any experience or thoughts that you could share with me?

Thank you!!

1 Vote

Quote from @AJ Wong:

Recently I've continued to get positive feedback on my posts so I'll keep it up until the comments turn negative..

For those that follow me, they will sense my bullish tendency towards real assets. For the record during the past twelve months I've been aggressively acquiring gold, silver, rare colored diamonds and working on a redevelopment rental in Mexico as I felt the dollar had peaked. I also have extensive individual experience with these commodities and realize I take more 'risk' than most..or do I?

Additionally my work with investors in Oregon and California has quadrupled and most of my recent clients have in retrospect secured very favorable terms on both the purchase and sale side.

This is not a pat on the back, but just to provide some context for why I think inflation is here to stay and that there is the potential that despite the challenges in the housing market, there could be more incentives to invest capital and reserves than disincentives.

Most obviously banks are failing. I saw a graphic that said the total failures are GREATER than 2008. If not for government backstops depositors could lose their entire savings above $250k! We are in a banking crisis, that is a financial crisis by another name.

The only solution is for the government to print more money. That's what they doing. This will continue to devalue to purchasing power of dollars. To reiterate I'm not an alarmist, but the threat of hyper inflation is growing and it is a known fact that if we used the same CPI from the 1980's and 1970's we currently have double digit inflation.

Inaction is not a solution, it is a risk. The risk of already invested time losing value and risking your future.

I am not advocating to act recklessly, in fact quite the opposite. I'm advocating putting your 'money' to work and in more challenging times that is going to require working for your money.

For the first time this generation, passive investing could be disastrous. When deposits at the bank aren't safe, what is?

You as your own bank. A portfolio of hard, tangible, real assets and real estate.

Currencies have come and gone but empires have been transferred and sustained on land and real estate.

It is the first and most essential asset. In my humble opinion, the more quality property you control, the more safe, secure and dependable your investment portfolio.

Sure rates are higher and valuations are up, but what if property valuations (and everything else) for that matter are rising because the value of the dollar is falling?

$20 sure doesn't go as far as it used to, does $50k even buy a new car nowadays? In comparison a recent client secured a Triplex for $50k out of pocket on a cash flow positive property. That was six months ago..that same $50k couldn't even purchase the same things today.

There are new investment intangibles to be considered when evaluating the investment potential of a property, including the declining value of the proposed capital by not being utilized.

Silver was $17-18 not so long ago. Today it's $26 but in my opinion still considerably undervalued. The same argument could be made for real estate, but either way I think dollars will continue to purchase fewer commodities.

Is real estate a commodity?

What are your thoughts, are values too high or do dollars not go as far as they should?

I think that ever since the COVID events, and the mass dilution of the money supply and overspending by the government, it would be hard to argue that the US dollar is not devaluing. It’s plain as day to see that ALL assets and prices have increased dramatically since then. The flip side to this is that debt is devalued in the process, which is a real benefit to those holding debt.

The other thing worth mentioning is that all of the major currencies in the world are facing equal difficulty, so I don’t think we have to worry about the US dollar vs other currencies just yet. Either way, I think sound real estate investments are a good choice at this time. I’m in the process and of buying my first house and I think that parking my money in a property is the best bet against inflation, especially since I will be house hacking and renting rooms.

As for gold and silver… who knows. It’s not a bad investment but it doesn’t keep up with inflation. I bought into the precious metal hyper before, but I think real estate is a better bet. I’d like to believe in gold and silver but it seems overhyped.

2 Votes

Portland, Oregon

Quote from @Account Closed:

Quote from @Scott E.:

Every day I spend some time in the morning getting up to speed on the latest state of the real estate market by reading various news outlets, listening to economists, looking at data around inflation/inventory/rates, etc. There are 2 things that I've gathered from the last couple of months that everybody seems to agree on:

1. Nobody knows for sure where the residential real estate market is headed.

2. Everybody seems to agree that there is serious pain ahead in the commercial real estate market.

You are being too rational. We've passed the point of rationality long ago (2008). (actually, long before that but most of you weren't around then).

What does every government want? To be re-elected.

As such, yes there will be some pain in the Commercial Sector but recovery in the Residential. Banks will belch money, bleed and merge, people that should go to jail for fraud and deception won't. The blame will be placed on China and imports or on Russia and oil, but life will go on much as it has since World War Two. No real economic correction.

With fractionalized banking and the economy dependent on debt spending instead of savings, and an election looming, the government won't allow things to fail and everyone will adjust in short order. There is no longer a need to print money since they can just add another zero to a spreadsheet at the Treasury.

Ya'll are talking like the Fed, Treasury, Banking System & investors are rational, on our side and trying to do the right thing for the American people, but they aren't. They will do what is necessary to get re-elected, make money, escape jail, whatever it takes and enough of you will vote for a repeat of the current government to keep things going like a clown at a circus twirling plates on sticks.

Great post

3 Votes

Quote from @Nathan Gesner:

I doubt you'll see thousands of responses. The majority of people are blaming high prices, high interest rates, low inventory, and lots of competition. Those are all true. It's not a great market right now and I expect it will get worse before it gets better.

David Greene compares it to swimming against the current. You can sit on the shoreline and wait for the current to change in your favor or you can keep swimming against the current. Those that continue to swim against the current may not make much progress, and they may even go backwards, but they will continue improving their technique and getting stronger. When the currents eventually shift, the people sitting on the shore will be late to notice the shift and they'll take time to get back into a rythm. Meanwhile, those that stayed in the water will take off like rockets and blow away the competition.

I love this! I'm in the middle of my first purchase in a hot market and sometimes I get a little discouraged when I'm reading these forums and seeing some of the deals that other people are getting elsewhere in the country. I bought a fixer-upper that I'm going to have to put a lot of work into, and when I look at home rentals on craigslist, I see that brand new, bigger homes are renting for the price that I'm paying for my mortgage on my outdated fixer-upper. That's a bummer because even after I fix it up, it still won't rent as much as a bigger, new house in a nice development. Nonetheless, I have to remind myself that I'm just getting started even though I'll be house hacking and still spending a comparable amount to my current rent, at least that money will be going into my equity now and that I can start building momentum. Plus if it were a "great" time to buy, I'd probably be priced out of the market even harder!

2 Votes

Providence, Rhode Island

Hi everyone,

I've been reading the forums, books, listening to the podcasts, and learning so much! I'm currently closing on my first house and I think I have most of the next steps figured out. Because the market is so hot in my area and properties are selling for so much, I couldn't find anything that will come close to cash flowing. On the other hand, by renting out two bedrooms I will be paying only slightly more than I currently pay for rent in my apartment. I'm a remodeler by trade, so I've already planned to remodel the kitchen, turn the family room into another bedroom, move the laundry to the garage and use the extra space to turn the powder room into a 3/4 bath with a shower so I'll have 2.75 baths and 4 bedrooms total. Once I can rent out a third bedroom, my cost of living will be significantly reduced.

Now, my confusion is coming into play with how I will eventually qualify for my next house hack? I am currently making about 70k a year at my main job, working a second job (which wasn't able to qualify toward my income because I haven't been doing it a full year), and my debt-to-income ratio is maxed out on this home loan. I was debt-free before this mortgage, and now my DTI ratio is at 49.7% to buy this $450k house with 10% down. I don't see how there is any opportunity to acquire another property in a year's time? I see everyone talk about this one year turnover time, but it seems like it's based on the assumption that everyone has a high-earning W2, right?

I am aware that if I continue my second job, I will have that income added to my overall income for consideration in the next loan, but I would basically need to make the same amount of money in my second job as I do in my main W2 to qualify for anything else in my area. I did read in The House Hacking Strategy book that you have to have 2 years of rental income for it to qualify as part of your income as well. So, from what I am gathering, the only way that I will be able to take on the debt of another property would be to continue my second job, and wait 2 years until I can claim all my rental income towards my overall income. Does that sound right? If I have to wait 2 years, then that's what I'll do, but I would really only like to do things sooner! Am I missing something? Hoping that you guys could point me in the right direction. I preordered Pace's book about creative financing, so I understand that that could be an option as well. All input is appreciated. Thank you for your ideas! :)

2 Votes

Seattle, Washington

All Forum Posts by: Adam Wayne

Adam Wayne has started 5 posts and replied 21 times.

Post: Do You Understand How Ugly This Is Going to Be?

Post: My first flip, who should buy materials?

Post: How to Get PMI Removed

Post: Reasonable amount of space for a 4 bedroom house hack?

Post: Reasonable amount of space for a 4 bedroom house hack?

Post: Reasonable amount of space for a 4 bedroom house hack?

Post: Are Property values appreciating or is USD buying power decreasing?

Post: Preparing to capitalize on the next market collapse

Post: So what's holding you back?

Post: Closing on my first house hack - trying to understand how I will qualify for the next