All Forum Posts by: Andres Felipe Alba Hernandez

 I agree with you is hard to enforce, the house is 20+ year older. I know it may sound as a BIAS from my side but I think this should NOT be legal to put covenant, see my logic here a builder build a whole community and one part of it is rentals the rest is single family, they put covenants and restrict the market to rent by room just to ensure they can rent their rentals that is a sort of monopolistic behavior and should not be legal. Again I am just bringing this as an interesting discussion. Now on your note, some people may just go through and do the house hacking and see if somebody comes to enforce it or not. But I believe is morally wrong and against capitalism to put this kind of restriction just my personal opinion. It can also be probably fight in court if this is a monopolistic practice if you think about it but who will want to fight it :D. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $340,000
Cash invested: $20,000

I bought a 5-bedroom, 2.5-bath home in a great neighborhood where my wife and I wanted to live and start a family. With just 5% down (yes, I paid PMI initially), we moved into the main bedroom, used the small first-floor room as my office, and rented out the other three bedrooms on Airbnb and Furnished Finder. I set clear rules: no cooking, but guests could use a microwave, toaster, and coffee maker.

What made you interested in investing in this type of deal?

House have good layout, good area, great schools, price point was fair for that area.

How did you find this deal and how did you negotiate it?

Via realtor, it was on the market.

How did you finance this deal?

Conventional.

How did you add value to the deal?

We improve the kitchen and the patio but just because we live here.

What was the outcome?

Appreciation Wins:
- Two years appreciated enough to remove PMI.
- Four years of appreciation -100k HELOC for investing.
Takeaways
This house hack worked because I chose a desirable home in a good area with strong appreciation potential. Despite initial doubts (e.g., “Who rents rooms without a kitchen?”), demand came from travelers, students, and nurses. Sharing our home a bit has been a small trade-off for living nearly mortgage-free while building wealth.

Can a builder Covenant try to restrict renting a room from "house hacking" in a primary home?

The city has no restrictions but they claim the neighborhood has... 

Thanks, everybody for the comments! 

Hello!

Facebook is building a new Data Center close to DeKalb Il in 2022, I believe that it will improve the appreciation of that are but my hypothesis is that it will improve even more the appreciation of Geneva, St Charles, and Batavia. The reason is that these towns have more restaurant offers better schools than DeKalb and they are even closer to Chicago downtown. The driving distance between the new facility and Geneva is about 20-25 min, not crazy? I would like to hear more comments about the impact of a Data Center facility. If people move to Dekalb the driving time can be as close as 5-15 min driving but the restaurants, schools, etc is way more limited than in the other suburbs and the distance to the city of Chicago is way more and with no train option while Elburn, St. Charles, Geneva, Batavia will have train options to the city, good schools, more entertainment offer.

https://www.chicagotribune.com/business/ct-biz-facebook-building-data-center-dekalb-20200630-ev6esvgobfcnpki4h3atjv4hky-story.html

Let me know your ideas.

Investment Info:

Single-family residence buy & hold investment in Barranquilla.

Purchase price: $20,000
Cash invested: $2,000

For some investors, these numbers look small but it is because of the currency exchange (at that time, I was not in the US). However, If I do a quick change of the numbers using the acquisition power of the money, it will seem like the deal described below:
Numbers corrected by acquisition power.
Investment: $57.000
Monthly Rent: $550 (about 1%)
Annual Taxes: $67 (non-significative)
The estimated raise of house value today is about 30%. Checking prices of houses around.

What made you interested in investing in this type of deal?

I had some money in saving and it was not producing money. The investment was small enough that in worst-case scenario I will be able to pay the financing part from my salary, luckily it payout from the rents.

How did you find this deal and how did you negotiate it?

A family member flip a house there and make a good profit, I decided to buy & hold. I bought this house new in a new neighborhood. I got low-interest finance and a big downpayment 70% of the total price.

How did you finance this deal?

Private loaner (family)

How did you add value to the deal?

Always keep the house in good shape, tenants tend to stay. Better to stop receiving one or two months of rent and keep the people happy.

What was the outcome?

I am getting an ROE of 10% per year through rent. It also helps me to save more because it forced me to put more money to pay out the finance part.

Lessons learned? Challenges?

If you find a deal that is adequate with your financial situation, go ahead. You will be able to pay the debt faster than you believe. Always keep the size of the deal according to your income.