All Forum Posts by: Anthony Swain

Hey everyone,

I have been in MIA on here for a few months, but I want to get back in the habit of posting to help other investors on their journeys. After being away for a while my inbox was full of people saying my previous forums were helpful, so that is encouraging for me to get back at it.

I wanted to share numbers from a recent house-hacking experience here in Charlotte, NC. My goal for this post is to give some insight into how a realistic house hack can shake out for someone in this area.

A LITTLE BACKSTORY:

This was a couple looking for their next house hack in Charlotte, NC. They were experienced investors, so they had an idea of what they were looking for and realized they may need to get creative due to the lack of inventory in the area.

They had a search set-up for multi-family and for any single family homes with 4+ bedrooms to see if there were any possibilities of creating a separate living space. After viewing a few potential multi-family homes, we realized they were not in desirable locations or needed large rehab projects. Shortly after they found a 5 bedroom/4.5 bath SFH that was renovated to be split into two separate units with separate entrances. It was a split-level home with upstairs being a 3/2.5 and the bottom unit was a 2/2 "apartment". The SFH search with multiple bedrooms helped find this property (wasn't listed as multi-family on MLS). The property was on market for a long time due to poor listing pricing with previous agents and the seller being out of state.

List Price: $475k

PP: $465k

DP: $23,250

Closing Costs: $0 ($14k seller credits) Negotiated seller credits & a brand NEW architectural roof.

*Used to cover CC & Buy Down Rate

*2/1 Rate Buy Down to 4.25% in year 1 then 5.25% in year 2

Renovations & Furnishings (MTR/STR): ~$20k

Cash Invested: $43,250k

Just a quick aside, I think now is a great time for investors, because there are a lot more people on the "side line". I'm willing to bet if rates trend down significantly than getting this property under contract would have had even more competition. Also, high days on market properties are worth digging deeper on to find seller's motivation and potentially unlock a good deal.

This couple will live in the top 3/2.5 unit & rent the bottom "apartment unit".

Rent $2k/month as MTR conservatively. They may consider STR too with more potential income.

Vac (5%) -$100

Main. (5%) -$100 Insurance $100

Cap Ex (10%) -$200 Taxes $220

Utilities -$150

NOI $1,130

PITI+PMI= $2,473

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

$1,130 - $2,473 = -$1,343

This couple will be splitting roughly $1,300 per month to live in a 3/2.5 house in South Charlotte near breweries, restaurants, coffee shops, and a short drive to South End, South Park, or Pineville.

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

Well, here is where things get better for them!

*IMO every house hacker should include all of these numbers into their overall decision/calculations.

Cost Per Year to Live: -$16,116

Amortization: +8,507.69 for 2025 (aka loan paydown)

Appreciation (4%): +$18,600

ROI= $10,991.69/$43,250= ( 25%) !!!

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

Typical rent for a 3 Bed/2 Bath home is $2,300/month in that area of Charlotte.

Their housing expense saved is ~$1,000 = ($1,343 (current housing payment) - $2,300 (average rent)

~$12,000 per year in housing expense savings!

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

NROI= ($10,991.69+$12,000)

. $43,250

NROI= ~53% !!!!

If you're looking to find your next house hack in Charlotte or surrounding areas, then I would be happy to connect and share my experience.

HEY @Caleigh McDonough! 

Welcome to the forums! :)

I hope you enjoyed your visit to Charlotte. Charlotte is such an amazing city IMO. I think you'd be making a great choice if you decide to move here. 

I LOVE the house hacking method and I think it is one of the best ways to get started in real estate investing. I am a little biased, because that is what started me on my journey. I purchased duplex last year in Charlotte and we have did a mix of short term/mid term rentals. My wife and I end up paying a little over a $1000 per month to live in one of our favorite neighborhoods. 

A few recommendations I'll give you:

1) Start working on your finances now. Down payment, closing costs, boosting credit score, etc. 

2) Find rockstar team members that will be your boots on the ground to help you find a great property to invest in.

3) If you're considering your house hack ROI. I'd consider your appreciation YOY, mortgage amortization, and your housing expense savings i.e. instead of paying $2,200 for an apartment now you're paying $1000/month since your roomates are helping cover mortgage.

You're in the right place to get your answers though. I'm happy to share my personal experience with house hacking in this market. 

Hey @Tomas Nuno,

House hacking with a significant other can be a super power! 

Single family house will require you both to be creative and adaptable, but it is definitely possible. 

I have clients that recently purchased a large single family home that was converted to two units. They plan to rent out one of the units, while they will be splitting costs between themselves too. 

If could still do same strategy without it being completely separated. Maybe you could have a walk out finished basement? Or a separate area of house with private entrance/exit? Maybe a garage conversion or ADU.

There are many ways you can do it! It all depends on your creativity and adaptability. 

Good luck Tomas! Keep us posted!

Hey @Sidney Duquette,

Do you plan on going the small multi route or a single family to rent out different portions of the home?

Small Multi- Should give you the most privacy. I'd just make clear private entrances, parking spaces, separate patios, etc.  My wife and I went as far as putting a fence down the middle of the back yard to separate the spaces. 

Single Family: Can you find a house with a separate walk-out entrance/exit? I see a lot of split level homes that would be perfect for this scenario. You can give them separate living quarters, separate entrance/exit, bathroom, etc. 

Hey @Ryan Haltom,

I agree with the others. It is the intention to live there, but if something comes up i.e. neighborhood troubles, job placement, additional family member, etc. then there isn't an issue. 

I'd shy away from actively openly sharing the intention to do it beforehand. 

However, 'm sure there are ways that you can make it work.

Good luck with it Ryan

@Masyn Grant Barney Hey man! 

This sounds like a great idea!

Small multis are tough to come by in Charlotte too. I think people are getting more creative thinking about separate living quarters (basements, split levels, etc.). 

That would be a great value add finding one that you could add a kitchen/kitchenette to make it more like a separate apartment. 

I love the value add in general because it helps your wealth-building potential and equity position. 

Thanks for sharing this Masyn!

Hey @Cody Sears,

Good for you! 21 years old and already educating yourself on real estate. Love it!

Fellow house hacker here too! I think house hacking already puts you in a good position to start, so additional creative strategies will help even more. 

You're on the right track! You can increase income by adding additional "rental units" whether that being an ADU, garage conversion, renting out extra living quarters, renting by room, etc.

You can increase income by short-term rentals depending on the regulations and profitability of the area.

My wife and I renovated our duplex to make it more appealing to short term renters. Now, we rent it out as a "mid term rental" with short term stays in between. It's been very profitable for us. The one unit nearly covers our entire mortgage. 

I'd say some things to focus on renovations $$$ are the kitchen, living area, bathroom, design, and photos. 

Good luck on your house-hacking journey. Please reach out if you need help with anything! 

-Ant

Hey Jim,

I think it is great you're thinking of how to give someone else an opportunity. However, a big investment like real estate takes careful consideration. I would tread lightly with a partnership like this. Without clear-cut expectations, exit strategies, roles, etc., then it can get uncomfortable fast. 

To piggyback on @Clayton Silva thoughts, you won't be able to use an LLC with FHA loan. Since it is conventional financing, then your friend/wholesaler may not even qualify without predictable income for 2+ years.

Partnerships are definitely possible and can be rewarding, but I would just make sure the relationship is outlined thoroughly and both members are contributing to the deal in some way. 

Good luck with everything Jim!

Hey @Ali Khalid,

Do your research on the different neighborhoods. What are the market rents, appreciation YoY, rent growth, etc. 

Run your numbers to see if the ROI makes sense.

I have friend that had a duplex in NJ and it appreciated very nicely for them in just a few years. They ended up selling for a healthy six figure profit.

I agree with @Nicholas Coulter. Connect with a local investor friendly agent and start attending local real estate investing meet ups.

Good luck! Feel free to reach out if you have any house hacking questions. I'm happy to help. 

Hey @Leah Miller,

I can imagine you may run into some issues with CC&Rs for occupancy and uses. 

You could get roommates to rent the extra rooms?

Are you very set on the condo route? Maybe you could find a smaller home with the ability to add on an ADU or garage conversion?

Also, are you set on Los Angeles?