All Forum Posts by: Anthony Swain

Hey Jesus,

THis sounds like an awesome set-up! A finished basement and an ADU?! It is exuding potential!

I think if you were living in it, then it should give you a lot more leeway of renting out the other spaces. 

If you want to be completely certain, then you can dive into the zoning regulations and make sure there isn't a maximum amount of un related individuals living in one residence or specific bans on ADUs without enough lot size.

I hope some of this helps! Good luck with it! It sounds like it can be a great house hacking opportunity for you.

-Ant

Good morning Wale,

I hope you had a great holiday!

You're right about the house hacking pros. House hacking is a great way to start your real estate investing journey. You can potential lower housing costs or even stay about the same as renting, while you build wealth through appreciation and loan paydown. Also, it is a great way to learn many real estate skills while maintaining a roof over your head haha. 

The considerations you mentioned are very important points indeed. I actually did a full breakdown with all things considered in a post "REAL House Hacking Numbers". It is essential to factor in percentages for your maintenance, cap ex, vacancy, etc. while analyzing potential investments. 

I do think it is VERY manageable to self-manage, especially with only 1 house hack or even a handful of properties. The property management software that is available makes it all seamless. Screening, applications, credit/background checks, rent payment collections, and maintenance records can be handled with a few clicks.

Thank you @Wale Lawal for always providing some healthy discussions & insight.

Have a great weekend!

Hey @Benjamin Sulka !

Happy Fourth!
So far things are moving along well. We actually had some cap ex things come up, but I think if you handle them out of the gate then you don’t need to worry for 15-20 years or more. 

Maybe next inspection, if things come up, then have some contractors give you bids so you can show seller exactly what it may cost. Most buyers will have same issues so it’s a problem they’ll keep running into. 

If you don’t have enough capital for some renovations, then maybe 

A) go for a more turn key place that you can finance for your first property

B) Live in the worse off rental to start and fix basic things yourself.

C) look into FHA 203k loan maybe?

D) Save a bit longer and have more of a cash cushion for renovations

These are just some ideas, but I’m sure there are many ways for you to still make it happen.

Happy to chat again soon Ben
-Ant

Hey BP gang, 

I wanted to check in to give a house hacking update. Our recent mid-term rental guests moved out and left the place immaculate. *wipes sweat off brow (THANKFUL).

 It was a solid five-month booking, so it was nice not having as frequent turnover with shorter-term rentals. I think "mid-term" rental guests tend to take care of the place a little more since it's a little home away from home. 

We raised our monthly rate slightly and were able to lock in a $2700/month booking to start this month. 

This leaves us with a little over $1000/month for our housing costs split between my wife and I. 

I'm sharing this to encourage others that house hacking is possible even in a growing/desirable city. It can be a great option to subsidize your housing costs, gain appreciation, and benefit from someone else helping to pay down your loan. 

I'd love to hear from other house hackers. What has been the biggest benefit and/or the greatest challenge?

@Gustavo Mendoza

Month to month can work, but depending on the tenant, this can lead to more turnover for you. A year lease will give you more stability and less management throughtout the year. 

However, if you plan to do a furnished rental, then I think month-to-month may be more common. The travelers might only stay a short period of time and only stay for a few months. This message might have more property management, but possibly more income.

For example, I have a duplex house hack in Charlotte. We have the other side as furnished rental to do "MTRs". I'd be open to a month to month lease, but I'd still have them go through same screening, same deposit process, and same rules as other tenants. This benefits me, because I'll still collect the rental payment and have the ability to evaluate the tenant before anything more long term is signed. If it is a good fit for both of us, then we can always extend during their stay. 

I hope this helps! Feel free to reach out.

Welcome AJ

Fellow house hacker here. As others have mentioned, house hacking is a little more difficult to completely cash flow while you're in it. This is due to interest rates, more and more investors, retail prices, etc. Fortunately, you can get creative to increase the income. In a perfect world, you'd cash flow while you're there, but even if you are decreasing your living expenses, then you're winning. You will get appreciation, loan amortization, and housing expense savings while you're there. 

Your ideal window doesn't have to be in one year windows if you find a great house hack. You can stay there as long as you want, especially if it is somewhere you like to live and it's increasing your net-worth. 

Good luck Aj. Feel free to reach out if you need any help along the way!

-Ant 

 Oh snap! I didn't see this! 

I'm guessing you took everyone's advice and got the debt under control. GREAT JOB!

I see you went with a larger single family home. I'm assuming you're renting out by room. This is an awesome strategy for your situation. 

Keep at it! I can't wait to hear about property #2.

-Ant 

Hey @Steve Steve! Welcome to the community!

I respect the vulnerability by laying out all your financials. From what you've showed, I'd say your main focus should be working on your personal finance foundation rather than diving into an investment. Real estate investments can be very capital intensive, so it is wise to have a strong foundation before diving into your first property. 

I was a former travel nurse, so I am familiar with your situation. It is smart to take advantage of these high income years to invest in assets, but you want to set yourself up for success. You can eventually get into a situation where you buy a primary that you rent out while you're away and basically have it pay for itself. I'm sure that would be ideal to give you a place to stay between assignments and give you the freedom to take travel assignments anywhere knowing that you can rent out your space. 

However, I think you should work on those credit cards AGGRESSIVELY. Your credit card utilization is approaching the upper limits and your monthly debt payments are pretty high. If you're really serious about this, then I think selling your paid off car, trading out of the truck for a more economical vehicle, and using a contract or two to funnel money into those credit cards is the move.

Keep at it Steve! As a fellow healthcare professional, I am rooting for you!

-Ant

Hey @Priti Gupta,

Great question! I'm a fellow house hacker here and we are keeping separate accounts for our duplex income/expenses. This is helpful for a few reasons:

1) It will be easier to track performance of your rental.

2) Your CPA will thank you come tax time.

3) You' will thank yourself for not having to dig through old receipts, bank statements, etc. to find expenses and income for tax time. Haha

4) Once you do move out, then you already have the accounts set up, so you can make the transition easily. 

Let the good house hacking times roll!

-Ant

@Demiss Shippley

House hacking in expensive markets is doable, but you may need to be more flexible or more creative.

I agree with @Benjamin Sulka, likely in this environment plus being in a high COL, you'll likely not be able to cashflow unless you have a SFH with many rooms that you rent out individually. I am not sure of the laws for NYC, but that may not even be a legal option depending on their restrictions.

As Ben mentioned, if you can reduce your living expenses while paying down mortgage and getting appreciation, then you are probably greatly impacting your net-worth.  

My best advice is to keep analyzing properties and different scenarios to gauge what might be the best strategy. Once you have your ideal strategy in mind, then you can really focus your efforts there. Connect with other real estate professionals in the area, because they can be HUGE resources on your journey. GREAT agents, lenders, contractors, wholesalers, etc. are worth their weight in gold. Fortunately, you are in the right place to connect with some investor friendly RE pros!

Keep at it Demiss! We are here to help. Feel free to reach out.

-Ant