All Forum Posts by: Anthony Swain

Hey @Ashley Harris!

Awesome that you and your husband want to leap into house hacking/real estate investing. My wife and I did the same thing last year when we moved to Charlotte. We purchased a duplex in the city, renovated it, and rented the other unit as an MTR/STR hybrid. It has worked very well so far!

I think house hacking with a significant other is a huge benefit. It's like you're super house hacking haha, because you split the costs with them too. 

@Rick Albert hit the nail on the head with his comment. Look for properties with high days on the market (DOM). Properties with high DOM may have rough tenants, some issues, or just bad marketing by an agent. You might be able to find a hidden gem that people have passed over. However, make sure the properties fit your buying criteria and the numbers make sense to you. If the numbers work at a lower price point, then find an investor-friendly agent that is willing to submit offers for you. Some offers might get ignored or outright refused, but all it takes is one offer to get accepted or countered to start negotiations. 

@Hunter Stoudnour recommends a great book! I agree! It is house-hacking gold haha.

I want to chime in about the property location. In my experience, I think property location is everything. I say this for a couple of reasons. 1) You will be living in the property, so ultimately you want a property that is somewhere you would like to live 2) Better location will be far easier to rent & likely demand higher rents.

Lastly, I am unsure if you have an Instagram, but I have a house-hacking physician assistant friend who posts a lot of great content about her experience in Pittsburgh @theinvestorpa

Good luck Ashley! Please reach out if you have any questions :)

@Sam Trulli

Good question!  I think it ultimately depends on your goals as others have mentioned. Do you mind sharing your space with multiple people? If yes, then both options can be on the table and will give you more options to choose from in the market. If no, then maybe a duplex or something with a separate dwelling unit is the move. 

My wife and I have a duplex in Charlotte. For us, we would not want to live with our tenants, so the duplex or ADU were the options. Personally, I love the duplex idea, because when you move out, then it's easy to manage renting out both units. You won't have to rent by room or decide how to split a house for rent in future. However, that isn't impossible to do if you go that route.

If duplexes in your area are uncommon (Charlotte was too) you might have to be patient. Set up a drip campaign with an investor friendly agent for your buy criteria. Analyze every single deal and be ready to make an offer if the deal makes sense. 

Good luck Sam. Please reach out if you have any questions. I'm happy to help!

-Ant

@Francis Bediako Hey man!

You're crushing it. Senior in college with $30k and ready to purchase a duplex to house hack? You're def ahead of the curve. 

@Jay Thomas did a great breakdown of your loan options . I think FHA or conventional 5% are going to be easiest for you to apply. Hard money loans are a great option for off-market properties, but that is a whole other world that I may not suggest for someone just starting off unless you have some rock solid mentorship.

I would think you may need to establish some work history and dependable income to be more appealing to lenders, so that is something to consider.

@Daniel McDonald will be a good house hacking resource to you in Mass. Investor friendly and house hacking agent.

Francis good luck man! Please reach out if you have any questions along the way. We are here to help!

-Ant

@Anthony DelVecchio Hey! 

Fellow house hacker and Anthony here haha.

Great question! I feel like this is one of the most commonly asked things for house hacking, "What is the next step". It really is for you to decide. What are your goals? What was your house hacking experience? 

If you plan on rinse and repeating the high leverage house hacks (low down payment FHA), then you can always refinance the FHA into a conventional and use your FHA loan again for the next property. You can keep the FHA loan and use a conventional for your next. You have many options, so it is important to connect with a knowledgeable lender to give you sound information on your options.

You don't necessarily need to sell the property after one year. You can keep it, then rent out the entire property when you move out. You can decide to stay in the property longer. This may benefit you to stay at least 2 years to benefit from the 2 of 5 tax benefit.

As others have mentioned, in competitive markets many sellers are not interested in FHA offers, because of the stricter requirements. It may be more practical to use the 5% conventional loan product.

I'd suggest to connect with a local investor friendly agent and make a game plan to get your first house hack. You got this! 

-Ant

Hey @Austin Berlick from Austin haha

Renting by the room is definitely more task heavy than other forms of renting. What about good Standard Operating Procedures (SOPs) to make it easily repeatable? Then, possibly you can outsource some responsibilities to a lead tenant in exchange for discounted rent? I'm just brainstorming here...

If you don't have a lot of margin to work with a 5 bedroom rental by the room, then is it really a worthwhile investment? I think it would be important to look at your ROI after your move out and if its worthwhile to hold or potentially sell to roll capital into another more lucrative investment.

Good luck with future tenants & the property!

@Mason Griffin Welcome to BP and the forums!

This is awesome that you and your brother want to do this together. I think you can definitely make a great team, especially since both of you have the potential to utilize your VA loans.

Here are some of my quick thoughts:

1) You say you want to invest in real estate for passive income. Myself and I'm sure many more experienced investors would agree that real estate is almost never completely passive. Even if you make it mostly passive with management, what is your passive income goal? I'd define that first. Is it enough to quit your W-2? Is it enough to pay xyz bills? Etc. 

2) Starting with a duplex is a GREAT idea, especially splitting it with someone (your twin). You'll be subsidizing mortgage with renters and splitting the rest of costs with him. AWESOME!

3) I'd definitely connect with an investor friendly agent and/or lender on here or from local meet-ups to help guide you on your loan strategy. 

Hypothetically speaking, one idea you can each use an FHA loan to get properties, then move out and each use a VA loan on the next property. If you did this, you'd already have 4 properties and potentially 8, 12, or 16 units under your belt in the next 5 to 10 years.

4) Get super focused on your strategy, house-hacking, storage, etc. and concentrate your efforts on that. It is easy to get distracted, but where you focus the most attention will get results. 

5) It sounds like you want to live a life by design. "Spend my days fishing" A small & mighty portfolio might be the best approach. Look up Chad Carson and his book Small & Mighty Real Estate Investor. It is one of my favorite RE investing books. 

Good luck with everything! 

@Benjamin Carver Hey! Fellow house-hacker here.

Thanks for sharing this update. I actually just was reading through another forum with someone asking about their experience house hacking with rentals by the room. You're a PRIME example. 

I agree that "Mid Term Rentals" are less of a headache. Less turnover and more consistency. 

I do a hybrid with our house hack. Target is for MTRs, but we do STR in the gaps between guests.

In the future, once we move out of our unit, we may do one MTR and one STR. I think experimenting with both is a great idea while you're living in it. Less risky, because it's still a roof over your head and you can see what performs the best.

Good luck with everything! I look forward to hearing more updates in the future. 

Hey @Alan Asriants

I agree with @Jake Andronico & @Daniel McDonald, it isn't for everyone, but it can certainly help those that do it. I'd say it can be a major hack for a younger person that wants to subsidize mortgage with room mates. I was on the other side of this as a renter in my early & mid twenties. Looking back at it, I wish I owned the home and rented out the rooms instead. I most certainly would have been further along in my investing career. 

Many argue that I couldn't imagine doing it with a family. Once again, it isn't for everyone, but the sacrifice can be rewarding in the long-run. I personally know several families with spouses and children that rent out a portion of their home (finished basement/private entrance room, etc.) that offset their mortgage substantially. This allows them more financial flexibility, more discretionary spending, working less, and more time with loved ones. 

There were my two cents. Haha

Hey @Jeffery Cooperr

Fellow house-hacker here! 

It sounds like you like to stay ahead of the curve with things, but like others mentioned, I think it may be a bit too early for them to know if they are going to renew lease or not. I'd reach out in the Fall October/November. By then the tenants may have a more accurate idea and it still gives you plenty of time to plan accordingly. 

Also, is there any wording in your lease for appropriate notice of extension by either parties? This might be something to consider, because the tenants might feel a bit pressured if the lease stated something differently. 

Good luck with it! If they're good tenants for you, then I hope they stay haha

Hey @Jacob Zivanovich,

I’m glad you found it helpful man! My goal was to give a good example for someone else. 

I counted amortization as a plus because I’m highlighting the amount of principle I’m paying down. That principle paydown is your new equity in theory. It may not seem like a lot month to month but over a year it can be a few thousand. After several years, it can be a larger five figure chunk. 

Please reach out if you have any questions! I’m happy to help!

-Ant