All Forum Posts by: Bryan Balducki

@Daniel Kevin Lara as a house hacker myself, I tend to point people towards getting a nice property that needs little work so you can quickly rent out the rooms or Airbnb and cash flow. Getting a rundown property can be overwhelming starting off, especially if you don’t have great contractors already lined up. You could also get a property that needs some cosmetic upgrades in which you can complete in a month or less. I’d consider the amount of time it could take to renovate and the cash flow lost during that time. Getting a “turn key” property is less time/energy needed and you can focus the energy on renting out the rooms/setting up your Airbnb. Just my thoughts, wish you the best!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $415,000
Cash invested: $9,000

Single family converted to duplex, airbnb with 2 kitchens

What made you interested in investing in this type of deal?

I wanted to find a property that I could airbnb one unit and live in a private unit. This property has a separate entrance to the downstairs unit and the space to add a kitchen.

How did you find this deal and how did you negotiate it?

I found this deal on the MLS and negotiated 6k in seller concessions to cover some small structural concerns

How did you finance this deal?

I saved up for a downpayment and represented myself

How did you add value to the deal?

I added a door to the stairs to separate both units and added a kitchen to the downstairs unit

What was the outcome?

I have listed it on airbnb and already have reservations. Hoping to reach about 1k-2k over the mortgage depending on the season. The kitchen almost finished and only needs cabinets for completion.

Lessons learned? Challenges?

I learned that there is always more to fix than expected when buying an older house. Challenges include getting my contractor back to finish drywall, getting the plumbers scheduled to finish the work and supplying the furniture/supplies for the airbnb which gets costly.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I represented myself as the agent and used Michael Stone with Megastar Financial as my lender

October 13th Wednesday, join us for the Sloan's Lake House Hacking Meetup at Joyride Brewery! This is a casual meetup co-hosted by Jeff White and Bryan Balducki, two experienced house hackers and investor friendly agents working with The FI Team and eXp Realty. Meet on the rooftop for drinks and real estate investing talk. Anyone is welcome! House hackers, agents, investors, those interested in RE investing, those in the RE industry, those looking to purchase their first investment, and those looking to learn more...Bring your friends and let's get Financially Independent together!

@Jessa Turner I'd question what your time is worth and if you think the hours spent going through small claims is worth it. Personally, I'd try to compromise with the HOA to pay less or just pay it. It may take more than 800$ of your time and energy to fight it.

@Jason Proute getting the loan will depend on the condition of the property. If you get a complete fixer upper in bad condition, then the banks won’t loan on it and you will have to go with a hard money or portfolio loan. If you get a property that just needs some cosmetic upgrades, I’d get a traditional conventional loan and take advantage of the low down payment/rate. For your first property, I would recommend getting something that doesn’t require too much work, and then rent out the other rooms as quick as you can. Look for 5 bedrooms 2 bath and higher to completely cover your mortgage. Getting a full fixer upper might be a bit overwhelming for your first deal, but have had it if you have higher risk tolerance and reserves. Hope this helps!

@Dan Ashley you could consider a partnership to afford the down payment or getting a personal loan from a close friend or family member. House hacking is definitely the way to go but even a condo purchase could make sense over renting, depending on if you can rent it after a year to cover the mortgage. You could look for a property that would work for a short term rental, which could increase cash flow allowing you to quickly put more money in reserves and for your vacation home, or to pay back a money partner. Just my thoughts, hope you the best!

@Melanie Stephens trying to fix the water heater myself.

I YouTubed it and realized it would be easy to replace the dip tube in my 15 year old water heater. Big mistake, the old dip tube fell into the tank and there was no way to add another one into the spot, so I put everything back together and attempted to isolate the tank with the valve in hopes that I could still get the water turned on to the rest of the house. Well, the isolation valve broke off instantly and sprung a leak leading me to shutting off the water to the whole house. I had to cancel 6 reservations but before I could block the date, new reservations would come in that very second. It was a nightmare, I had to call airbnb support to block off the dates and then paid 6k for a tankless heater which would take 3 days to get the parts. I would have purchased a cheaper water heater, though it was going to have to be retro fitted to the space for 3k and would take 5 days to get in to the shop. I needed water ASAP and bit the bullet, purchasing a tankless heater. Lessons learned, don’t fix things yourself when you have the place booked and not everything can be fixed using YouTube.

@Miguel A Guerrero this is great that you are clear on what you want to do. I’d start by attending meetups, networking, and read/listen to as many podcasts and books as you can. I’d also talk to an investor friendly lender to see where you stand with financing/where you will need to be for your first property. Reach out to experienced investors and see what you can learn. Think about forming partnerships or a team to streamline your progress. Hope this helps and good luck!

@Bryan Gregory I first off, I congradulate you for figuring out this path! House hacking is definitely the way to go! Everyone has a different opinion on reserves but I live by the idea of having around 10k per property in emergency funds. This is in case anything unexpected happens and for peace of mind. You can get by with less, but I think 10k is a good number to strive for.

@David Barwick pro forma cap will include repair costs. To get pro forma cap rate, you would divide NOI by the (investment cost+repairs). NOI is the gross profit minus all expenses. Purchase cap is the cap rate at which the investment was purchased at. The deal doesn't seem amazing from a cash flow perspective in my opinion, though some would be happy with a $100 monthly return. Hope this helps!