All Forum Posts by: Christopher Davis

In September of 2017 we purchased the book, by Ben Leybovich. Later that September, his wife, Patrisha, found us a house that checked most, if not all of the boxes needed for us to get started.

I made this post over four years ago describing the initial process and setup.

So how has the LHH held up? Quite well I’m happy to report. The goals were rather modest at the time; my wife and I aimed for the hack to cover maybe half of our mortgage before expenses and anything over that would be gravy. There are reasons for this humble target that I won’t go into now.

This target was consistently hit earning us anywhere from $500 to $1100 per month the first year. The initial mortgage was $1655 and 1.5 years later was refinanced to capture a lower rate and drop the mortgage insurance bringing the payment down to $1313. We have been able to nudge our rates up from an initial $46/night to the current $120/night. We prefer the higher rate and a slightly lower occupancy rate to a lower rate at near-full occupancy.

At present it’s a rare month that does not cover the full mortgage including expenses making it a true, full-on “house hack.” We’ve had months that have doubled our monthly note and it normally takes about 10 days of occupancy for the house to "pay" for itself.

The purchase price in September 2017 was $260k and the latest estimate of value was $470k. Considering the fact that we had been renting prior to the hack, that the process is working exactly as advocated and the market has had such growth, it is a non-trivial ROI and we're very grateful to have followed Ben's advice. I doubt that we would have found a better place to put our money to work more effectively.

Thanks, Jordan and Ben.

We're off to the races!

This is part ‘success story,’ part shout-out.

My wife and I read the book by @Ben Leybovich on house hacking, and we were really part of the target audience of the book. We got bounced around pretty hard in the crash (though that was mostly due to our foolish approach to investing.) We liquidated over the next couple of years and had been renting ever since.  We pretty much followed the approach laid out in the book and we ended up finding a great house with a casita.  

Ben had recently moved to the Phoenix area which is where we live. Traditional house hacking here can be tough if you have small kids because of the areas in which non-commercial multifamily homes tend to be located. Every time we renewed our lease it really burned my posterior so I read the book straight through and got in touch with Ben via email. He called me and was incredibly gracious and generous with his time and advice on what he thought was best for our situation.

Having the expertise of a BP notable like Ben at one’s disposal was certainly a plus but we also were able to hire his wife, @patrisha Leybovich as our agent. This was great because she understands the parameters of the approach so well and she’s just so good at her job (seriously, the best realtor we ever dealt with).

We found a great house for a vacation rental house hack. It is situated close to the intersection of Interstate 10 and the 303 loop in the west Phoenix valley and has an attached apartment, or “mother-in-law” suite that is just perfect for a vacation rental on AirBnB/VRBO. We end up with almost the same square footage in a much nicer house and are paying a $1550 mortgage (265K PP with 5% down) instead of $1200 on rent. The suite is just this week being listed on AirBnB and VRBO so there is no revenue yet but even a very modest income from the rental unit will have us paying less for our mortgage than we did on rent.

This is a tiny thing for many folks here but huge for us. We are very happy and excited with our ‘hack’ and I’m glad to have taken at least a small step back into investing and building equity. My wife and I are both grateful to the BP community and the people who share their ideas in order to help others improve their lives. We’re also thankful to the Leyboviches in particular. They are both great, caring people who are sincere about what they do and practice what they preach.

The one caveat I give is you should wear your big boy/girl pants if you reach out to Ben, he gives it to you straight; do something dumb and you will be called a dummy!

Updates to follow…

PS if anyone wants any more specifics on anything regarding our house or experience with the house hack project, I’m happy to share or help in any way I can.

I'll also affirm the need for getting parents to cosign a lease renting to students.  I've rented to students twice and needed the parents to intervene several times in both situations.  I stopped renting to them (no offense to the students reading this).

Be clear what the students are responsible for in the lease, they probably will not even do that which is clearly their responsibility.  If you're managing the property yourself, inspect the property every few months.

If the parents are the ones putting up the security deposit they'll knock the students' heads together if the house is left a mess.  

There is often a limit to what can be charged as a security deposit.  You'll need to check that in your state. 

Welcome to  BP!  Have you checked out the Ultimate Beginner's Guide?  If not, click the "learn" tab and give it a twice-over.  

All the best to you!

welcome @Denise Warner, love the goals, may you achieve them all

still working through this, their finances are ... jumbled and there is absolutely no organized plan or priorities.  Income might be the least of the problems here.  That probably makes the problem more solvable.

 Got it, Alan.  Thanks!  I work evenings to will not  be able to advance the project further until tomorrow morning.  Sincere thanks to everyone who has offered advice and help.  

 Check on the lender's perspective.  The husband is the sole earner and owns a landscaping business.  THey can only afford to pay on one or the other.  The timeline of events I will have to find out as well as the specifics on the payment histories.  Renting the current home might be an option.  Rents are around 1100 so I'll have to find out what their payments are.