All Forum Posts by: Anthony Swain

Hey @Bubba McCants,

GREAT conversation starter in this forum. Thanks for sharing!

House hacking is MANY investors initial approach to real estate investing and rightfully so due to all the benefits of it. House hacking is getting more and more creative which is really interesting to see. 

Finding the Ideal Property: I chose a small multi family due to my wife's preference to not have a shared space. Our duplex made it easy to have separate space from our tenants. We are able to do short term rentals with the other unit and learn many skills throughout the process. 

In the future, we may consider another larger/nicer duplex or possibly a unit with ADU or separated space in a large SFH.

Financing Insights: We wanted to utilize leverage on a larger asset, so we used low down payment owner occupied financing. Originally, we were shooting for FHA, but found it difficult due to seller's apprehension. Luckily, Fannie Mae introduced the 5% down small MF loan product, so we took advantage of that.

Tenant Management: Property management software like RentRedi, Stessa, Avail, Turbotenant, etc. make property management SO much easier! I think making things easy for your tenants, i.e. electronic lease agreements, ACH bank payments, etc. helps the process. 

Communication and consistency are key. Communicating effectively with tenants your exact expectations can help guide them to your specific standards. Also, consistent tenant guidelines can help you make decisions, so you are both fair and preventing unwanted tenants reside in your properties.

Balancing Privacy & Profit: I think this is a personal preference and depends on everyone's individual circumstances. 

Zoning and Regulations: This is very important to understand, so you know for certain that your intentions for the property are legal. If anyone plans on doing short term rentals to some degree or building additional living space, then this is imperative. 

Maximizing Cashflow: I decided to do the "Mid Term Rental" strategy for my wife and I's house hack. The delta for a furnished rental was large enough for it to make sense. There is more upfront cost, but if your vacancy is low, then you can have significantly more income over time. 

Long-Term: Appreciation, loan amortization, potential tax benefits, and housing expense savings.

I'd say the unexpected benefits of learning property management, deal finding, project management, renovations, and DIY-ing were more impactful than I initially thought. You learn ALOT by simply taking action, so I'm glad I took the leap for the 1st house hack. I think what I've learned will help for future investments. 

I think my questions for other more experienced investors are:

1) What was the average length you stayed in your 1st House Hack?

2) How do you balance upgrades/cap ex to protect investment versus over-investing, because it is not your forever home? I ask this, because it seems like there are endless ways you can upgrade property, but not everything directly adds value to investment. 

I hope some of this info is helpful for the next house hacker!

-Ant

Hey @Joseph Mulero!

Congrats on the 4Plex House Hack! That is killer! Three potential income producing units now and four once you move out. Hopefully, you were able to utilize a low down payment option to utilize leverage. 

It sounds like you're in a very advantageous situation with only $500 payment towards housing expense and saving $3k/month. That $3k per month will add up substantially over time. 

I think you're in a great position to stack your cash position for a second house hack or potentially have enough for an investment property down payment in a year or two. 

It sounds like you already have the skills for deal flow since you've wholesaled some properties and you'll have the cash savings built up. If your weakness is rehab, then maybe a good partnership would be with someone that has a strong contracting background.

As many more advanced investors have shared with me, "The true power in real estate is witnessed over the long-term". Keep taking your journey step by step and those actions will compound for the future. 

Good luck Joseph! Keep at it and I look forward to hearing of your success!

-Ant

Hey @Gloria McDonald

Welcome! I'm not sure if you're house hacking, but commonly suggested marketing sites for long term rentals are zillow, apartments.com, and Facebook.

If you're interested in doing short term rentals Airbnb, VRBO, Booking.com, and Furnished Finder.

I hope this helps!

-Ant

@Cameron Woodward LETS GO!!

Looks like the property is in pretty solid shape! I'm sure if it is in a decent area and the inside looks okay, then it should be easy for you to rent out. 

Is your plan to rent by the room?

Maybe ask the guy in the photo if he needs a room. Haha

Happy House Hacking!

-Ant

Hey @Jean Pierre Jabo,

First off, WELCOME!

Second, congrats on being under contract for potential house hack. It sounds great off the cuff. I hope the contingency period goes smoothly for you.

@Nathan Gesner makes some fantastic points! I think following that advice would be very helpful for you.

To piggyback off of what he said, I'd focus on the long term vision. Build a solid foundation from the start, so adding to your portfolio won't be a problem. Use this first investment to see what you like and don't like. Do you like being a landlord? Do you like hosting (MTR/STR)? Do you like any DIY projects or is hiring a contractor your thing? Etc.

Your net-work is huge in this industry, so I'd encourage you to go to local meet-ups, spend time with other successful investors, etc. 

Keep educating yourself. Every resource Nathan mentioned was great, but I would like to add Chad Carson as a great resource. His book The Small & Mighty Investor is a great read and possible mindset shift for your investing career. 

Good luck on your first house hack Jean!

Hey @Austin Powell,

Happy Hunting! It sounds like you've taken steps toward education, but now it is time to take action.  Education x Action = Results

You got this!

1) It sounds like in you're situation that a SFH renting by the room can maximize your situation since you may be willing to share the space. As @Jake Andronico mentioned, more bedrooms can lead to more income for the property, but potentially more conflicting personalities haha. I think screening will be your best friend if you go this route to prevent the most headaches. 

2) I'd say the biggest problem renting by room is potentially laws about unrelated persons living in same household. Double check that before purchasing a property. 

3) FHA 203k loans would obviously be ideal in a vacuum to factor in renovation costs into loan to decrease your out of pocket expenses. Unfortunately, there are several barriers, including finding a seller willing to accept this loan, a lot of lender red tape, and then coordinating a qualified/licensed contractor to do all the work. It isn't impossible, but not easy either.

I'd recommend a first time home buyer loan while looking into any down payment grants you may be eligible for in that area. Speak to multiple lenders and see who can give you the most favorable terms and loan product. You can find loans anywhere between 0-5% down depending on your individual circumstances. 

4) I am unfamiliar with jacksonville laws and regulations, but in general, a property with unused space is ideal for these conversions. For example, a garage, a large lot, a covered patio on foundation, etc. 

Good luck Austin! Keep us posted!

-Ant

Hey @Trace Adams,

Congrats on being under contract. Hopefully it goes as planned for you!

I'd definitely double check and triple check your local/city regulations in regards to rentals, so there are no surprises as to what you can do legally. 

Off the cuff, I think an STR would do well being close to Red Rocks, but I don't know the # properties available in the area.

Converting into a duplex could be a good idea after you move out, but once again, I would double check and triple check zoning ordinances and codes to be compliant. 

Lastly, 100% let your insurance know your intentions. You don't want to be in a position where something happens and then they deny coverage due to undisclosed use of property. 

Good luck Trace!

-Ant

Hey @Benjamin Sulka VERY soon to be house hacker,

MAN! I am rooting for you brotha. It sounds like you are very very close to your 1st deal. Personally, I am STOKED for you!

Anyway...

Here are my two cents. With these interest rates, if you can find a house hack situation that you are paying the same, slightly less, or I'd argue even slightly more, then I think it can be worth it for these reasons.

1) You will get to live in your preferred location. I think this gets down played, but getting to live in your desired location is a HUGE factor. Maybe you will have a closer commute to work, maybe you're closer to parks, favorite restaurants, interesting events, etc. The increase on your quality of life is hard to measure, but easy to feel. 

2) As you mentioned, APPRECIATION will most likely be higher in more desirable areas. As a house hacker, you'll benefit from this, especially utilizing leverage with a low down payment. For example, if you buy a $200k house with 5% down (10k) and the house appreciates by 5% (10k), then you get 100% of that equity increase. Year over year this can really add to your net-worth & equity position. 

3) If the property comes close to breaking even with you moving out, then it can still be a good deal. Interest rates will likely come down, so you can refinance to a better rate. On the other hand, if interest rates stay the same or go up, then you'll be happy you didn't wait around until they did. 

Rents will likely go up over time as well.

You can also get creative to increase the income by doing MTR, STR, rent by the room, etc.

4) Loan amortization will increase your networth over the next 5, 10, 15 years+. 

Keep at it Ben. So stoked to hear when you nail your first deal!

-Ant

Hey Michael, 

Sounds like you got into a little pickle there. It would have been great to have the basement to rent out. For example, I know in Baltimore, people do this with the city rowhomes allll the time (convert basements into extra living space). It is a shame that it is against code. I'd double check with the city if there is anyway to possible get around this. If not, then I thought of something.

What about renting out the basement space as a workspace? I heard people have had success setting up divided rooms with desks, chairs, etc. to rent out as pseudo office space. I don't know the demand in your area, but maybe that?

Good luck with it!

WOW! What an amazing example @Jennie Berger!

House hacking can come in many many shapes and sizes. It doesn't have to be the traditional live in one unit and rent other out multi-family. It can be anyway, you offset your housing expense with income from the situation. In your situation, it is cost savings renting, which you explained makes a big deal in your quality of life. You get to live in your ideal location with 5 star amenities! 

The awesome thing about "house hacking" is the ability to get creative and mold it to the situation and lifestyle that you want. 

Also, it is very cool you've got to host so many different types of guests and actually enjoy the experience. It isn't for everyone, but sometimes being a great host IS. It clearly is for you! 

Thanks for sharing this :)