All Forum Posts by: Anthony Swain

Hey @Robert Mendenhall,

New house hacker myself. My wife and I settled on a small multi family approach, so we were able to purchase a duplex last December. 

Some things I looked for in the house hack:

1. Location (rapidly changing/close to amenities)

This will hopefully make it easier to rent and give you options to rent out short term if desired. Most people renting short term prefer to be closer to amenities/main location IMO.

2. Value Add

This gives you an opportunity to renovate the property and force appreciation. This will give you a buffer if there is a down turn in the market. 

If you're leveraging a low down payment, then this can majorly boost your return, because you get 100% of the appreciation not just 3.5% or 5%.

3. Save on Cost of Living

I'd say it is difficult to find a house hack in today's market that cash flows or leaves you with $0 to pay every month unless you're getting very creative. If house hacking can decrease your monthly housing expense, then it can be very beneficial in the long run. I'd argue that house hacking even to pay a similar amount compared to prior renting, because you'll get all the other benefits (appreciation, amortization, & tax benefits).

4. Ideally be able to rent both sides to cash flow in the future

If your property can cash flow after you move out, then you are in a strong flexible position. You can have options to stay, sell, or continue as a rental. 

These were some of things I looked at while analyzing properties. I think you would be wise to make sure you could cover the entire mortgage like others have mentioned, because things do happen. If you're relying on that income to cover the cost, then you can get in some financial trouble. However, don't let fear dictate all of your decisions. Sometimes you need to calculated risks, especially investing in assets like real estate.

Good luck with your search. Don't hesitate to reach out if you have any questions! :)

 Thank you Brian. You mentioned a good point. I think it is very prudent to think, "Does this property cash flow if I move out and rent out the entire property?" If yes, then you are much more flexible. If not, then you are more or less tied to the property unless you want to sell or pay for someone else to live in it.

From your numbers, the $2800 in rent x 2 would not cover the $6,100 PITI plus maintenance, cap ex, or vacancy reserves. You could be negative cash flow $1000 or more. You would be banking on a few factors out of your control to get out of that situation.

@Roy Gottesdiener

As a new house hacker, I am already seeing the benefits a few months in. I was able to learn about acquisition, renovations, project management, furnishing a short-term rental, using property management software, and lowering our cost of living compared to renting. Plus, we have our own place to decorate, make a home, and enjoy mostly how we want it. 

Yes, you have to factor in maintenance, cap ex, vacancy, etc. but the numbers can still work in your favor. As a house hacker, you can factor in the appreciation, amortization, cash flow (if possible), and your *cost of living savings if applicable. 

Even at $500k+ price points, the right house hack can still be very beneficial.

I think it can be a great opportunity for someone looking to start in real estate or simply subsidize their housing expense. 

Great info @Ryan Thomson!

I'm sure if you follow these strategies @Cameron Woodward you will certainly be heading in the right direction.

Do you want to rent out the rooms long term or short term?

As a new house hacker, running the numbers as a "Mid Term rental" made more sense. Depending on the demand for 30+ short term stays, then maybe that is an option. You can potentially be getting travel nurses, other business professionals, interns, etc. I like this strategy, because if all of their info checks out then you're most likely getting a quality tenant in place, especially with medical professionals that require strict background checks. 

One way, you can check the demand for "mid term rentals" is furnished finders stats page and looking for other furnished rentals on zilow/other listing sites. Are there many with immediate availability (could be low demand) or are they all booked until a future date (could be a good sign)?

TLDR; Decide if you want to do short-term or mid term rentals for increased income. Check demand on furnished finder, airbnb and other listing sites. If yes, then aim for a specific avatar and nail it! 

Anyway, good luck! I hope this strategy works out well for you!

 This was a massive move for us when we bought our duplex in December. We needed $28k to close versus $84,750 (15%) or $113,000 (20%) for small multi family. 

If she is going SFH route, then she might be able to get a DP even lower depending on qualifications.

Hey Tori,

I love that you're still getting creative with house hacking even with a small family. 

My friend Dave in Colorado (HomesWithDave on IG) just started doing a similar strategy. They bought a large house for their small family and converted a small area (private bedroom, bath, entrance) of their house to a STR. The STR doesn't provide access to rest of house as common area so they have their privacy mostly.

I'm sure you can creative with extra rooms, a garage turned living space, ADU, a furnished basement, etc.

Good luck! I heard great things about SLC. I look forward to hearing how it goes for you!

Hey Beth, 

Fellow house hacker here. Congrats on making the decision to house hack. It can definitely be an invaluable learning experience and wealth building tool. 

I'd say, not being able to afford the mortgage without rent and no reserves is probably a risky proposition. If you ultimately decide to do it, then I'd make sure the property will rented out easily and build reserves quickly after that. 

You can also consider even more creative house hacking strategies like others have mentioned i.e. renting out a spare bedroom of your unit. 

Keep us posted on how it turns out. Please feel free to reach out. I'd be happy to help :)

Hey Cole,

Fellow house hacker here in Charlotte, NC with my wife. 

I think it is ultimately up to you with this decision, because of overall goals and what you're investing philosophy is.

Some factors to consider, what would you be saving if you just rented?

$6,100 PITI + Maintenance, Cap Ex, & vacancy reserves

Versus whatever similar rent would be in the area.

If you're okay with this deal not being a homerun initially, but allowing you to live in an ideal location in a nice home with slightly less mortgage cost, then it may be worth it. 

On the other hand, if you're only banking on appreciation, then this seems like it would negatively cash flow even if you moved out unless you can favorably refinance. 

Wow great example! It seems like Denver has alot of these hidden gems, especially in these up and coming neighborhoods. 

Thanks for sharing this! I would love to hear how it goes in a year or so for the investor. 

Let me know if you have any questions or if you're trying to house hack in Charlotte, then let's connect!