All Forum Posts by: Brandon Rush

Hello Janeea,

I just purchased a property that I am house hacking with two tenants. It would be nice to be able to pick your own tenants but more common to purchase a property with tenants already in place. Here are some pro & cons I have found:

Pros: 
*Immediate cash flow from your tenants
*You have time to move in and not worry about finding new tenants right away. I will tell you now, once you move in, you are going to have 1000 questions such as who is shoveling the snow, who is taking out the garbage, do we take cash for rent and etc. Having tenants in place makes the transition a little smoother.
*Tenants will be able to give you a heads up on the neighborhood and how things normally operate. Example, they will inform you of weather parking bans, garbage days, and etc.
*You may inherit a long term paying tenant who is paying near market rent and takes care of their unit. This will make the transition pretty easy.

Cons:
*Obviously worst case scenario is you inherit a bad tenant. They can either be non paying or just a nuisance. You can potentially catch the non-paying issue by having the tenants sign an estoppel and having the owner show proof of paid rent. In addition, you can have the owner provide previous rental applications showing if they have anything on their record.
*Long term tenants think they have some kind of ownership in the building. They will be using to making minor modifications to the property such as painting the unit, using storage spaces, and etc. Trying to change the rules on how things operate may create a disgruntled tenant. This can be avoided by just finding out how long that individual has been in a lease. Also speak with the owner to see what the tenants have been allowed to do and what privileges have they been given.
*Tenants are paying under market and are on a lease. Nothing you can really do here except suck it up and wait it out. If tenants are way under market, it may be a little challenging to raise the rent significantly, especially if they have been there for a long time. Not too big a deal, just be prepared for the tenant to walk if they won't accept the increase.

In the end you just need to do your due diligence. I would say, most of the time you will have tenants unless you are rehabbing a property, but it's not that big a deal.

If you have any questions, just reach out. 

Enjoy the ride! 

You are a trooper. I agree that every podcast produces some kind of ROI regardless of whether it is redundant or not. At a minimum, these are some of the sacrifices we must make in order to stay unwavering in our journey to REI success. Another podcast you could tune into is the Real Estate Guys podcast. Its a little bit more business focused, but still on real estate. Keep listening my friend!

Jon, sounds like a successful experiment to me! Congrats my man. Would love to chat with you about your experience and future plans. I am currently house hacking and plan to continue as long as I can (or my wife will allow). I will message you.

Again, congrats!

Gabriel,

Start with reading Rich Dad Poor Dad by Guy Kiyosaki. Before you dive into real estate, you need to establish a mindset for why you are doing it. Following that I would read set for life by Scott Trench to embed some ideas in your head regarding personal finances and not following the path that most people take when in their twenties. This book is great of younger people like yourself. After reading those two books, THEN I would read the ABCs of Real Estate Investing by Ken McElroy.

The reason I suggest reading in this order is most people think I am going to invest in real estate and get rich. By taking on this mindset you will skip the "why" part of your journey and either burn out or start to find it uninteresting.

Good luck on your journey looking forward to seeing you post your successful property purchases here on BP in the future!

Hey Austin, I was in the same debacle for the past year. I was looking for a property to BRRRR as my first house hack but ran into a few roadblocks along the way. I was so determined to find a BRRRR deal I had my blinders on to some good turnkey cash flowing properties that popped up on the MLS along the way.

I think the key is figuring out what your long term goals are and working backwards from there. For me, not having to work or rely on work so much is a major goal. So that led me to the decision to pick up a turnkey property as my first house hack. I pretty much bought it full price will little equity. But it aligned with my goals as I am now mortgage free allowing me to not care so much about work being a major part of my life. It also allowed me to get started in investing.  It allows me the piece of mind to know that I have the flexibility to try new things, possibly fail and try new other things and not have to worry about paying on a mortgage or other debts.

Of course if you could find a property that requires some rehab and you can build some equity go for it. You will get the benefit of having no mortgage and some equity off the bat. Either way you go, there are benefits in both options. Again, just consider your long term goals and what is truly important to you in life. 

Good luck and let me know if you have any questions. 

Hey Josh,

There are a few ways you can better manage your time. Here are few suggestions:

1) Use your calendar. If you know certain events are coming up or you want to do something on a certain date, put it on the calendar and set reminders for 1,2,3 days out. 

2) Batching. If there are tasks you do a lot that don't necessarily have to be done as often, maybe batch those tasks and only do them once a week or once a month. Examples may be checking your mail or washing your clothes. If you set a specific time to do these task instead of doing them adhoc, you will free up a bit of time.

3) Use a task list like todoist. This is is a digital task list where you can centralize all the tasks you need to complete. You can schedule them as well. There is also a mobile app you can use which is great for those time you need to put something on your list while on the fly, instead of keeping it in your head. 

I have used todoist to organize upcoming task for buying and selling a property. 

My final suggestion (should have been my first) is to read the 4 hour work week by Tim Ferriss. This book will adjust the way you think about time and will definitely help you develop a mindset to better organize your time. 

Keep looking for the answers and you will find them. Good luck and let me know if you have any questions. 
 

Hey Davonn,

I believe you would be ok as long as you meet the length of occupancy requirements for each kind of loan, FHA is 1 year I believe. As for over leveraging yourself, its only over leveraging if your are purchasing properties with little to no equity with a low down payment. Generally those two will result in low or negative cash flow. But if you are using low down payments on "good deals", I would not say you are over leveraging.

Lastly, its going to be tough to get the 5% down conventional loan on a four plex. Often times, those are reserved for first time home buyers. Not saying it is impossible, it will just be very difficult. 

Either way, it looks like you are on your way! Good luck my friend.

@Cameron H. Forbis

Haha good topic! I personally don’t think most people hate landlords, you may be just constantly surrounded by them and it appears that way.

The best way to figure out the answer is to ask yourself “what am I doing wrong” or “what can I change”. Don’t see this as an insult. I ask these questions to myself all the time. It often results in me improving myself instead of going the victim mentality route.

Good luck!

Welcome to BP Anthony. I would definitely recommend you start surrounding yourself with other like minded people, especially those already doing it. This will keep you focused and on task. I would also recommend attending any meetups you can to get ideas of what others are doing in the area. 

I am also looking to invest out of state, do you have anywhere specific you are looking to invest?
 

Hey Joe,

I am not sure of the demographics of the areas but have you considered converting it into a senior living home? You will probably get a good return on an elevator investment. Unless there is a large population of elderly in that neighborhood, it may not be a good idea. For all you know, you are renting out to able bodied tenants for then next 15 year who never needed a elevator.

Another option to consider for a house that large is renting by the room. Sounds like there is more than enough space.

Last recommendation would be maybe converting it into a duplex. Not sure about the zoning rules in that areas, but an idea.

Either way, good luck and enjoy the ride!