All Forum Posts by: Cody Anderson

Great Question @Mike Levene! I started house hacking in the San Diego area. Definitely high cost of living, where the median home price is nearing $950k.

The first year of house hacking the property I cut my mortgage in half. Everyone thought we were crazy trying to buy in 2019 ("The housing market is going to crash!"), but we figured that the sentiment wasn't going to change in the near future. Time in the market beats timing the market!

We rented out the other unit (it's a duplex), and also the master bedroom in our house hack. We were getting a total of $2,700 per month for both of those renters combined.

When my wife and I moved out of the house, our first 2 years of owning it we were bleeding money on the home. We fixed the foundation and the flat roof issues with pooling water, and rents didn't meet the mortgage just yet.

In 2023, we finally started to cash flow. Rents increased about 5% per year, and when you take 5% on $3,800, that's almost a $200 per month increase for the year! Now, in 2024, we're seeing $4,000 per month just on the main unit and $1,800 on the other unit of the duplex.

Long story short, it's a long term play. We're in it for the long haul, and our future selves will thank us. Let me know if you have any questions on the process of appreciation and even tax advantages, especially since y'all are engineers!

Ian

@Cody Anderson haha thank you, I have learned a lot! Team cohesion is everything and honestly making sure you are an excellent communicator and the people you partner with are as well. One thing that's really helped me upfront is starting with honest, open conversations about our individual goals and expectations. We always do this over coffee or a casual setting where everyone feels comfortable. I also make sure we get on the same page by writing down our roles, responsibilities, and even how we'll handle potential challenges or surprises. You'll never truly know though until you jump in! I always create an LLC and an operating agreement as well. If you're interested, I've created a buying with friends quiz that gives you a full checklist of everything you need to do together, it's good for starting those important conversations. 

I have bought 10 homes all through partnering with friends or family and I love it as a strategy! But there are definitely some things to watch out for. Mixing business with personal relationships can get tricky, and you want to make sure you’re both aligned on your financial goals, expectations, and boundaries. Communication is key! I've seen partnerships thrive with clear operating agreements and a shared vision, but without that, you can hit some bumps. If you’re willing to put in the work to set things up right, it can be a beautiful way to build wealth together.

house hacking is still a very good option even in this market. However, it really depends on your goals and what you're trying to do to that will morph the strategy for you. I think FHA loans are still popular but if you can swing it the new 5% conventional rules are huge. I'm a 2x house hacked myself and try to put out as much helpful content as I can on IG (@househackandhustle). Always will to chat about my experience!

@Cody Anderson

Co-buying vacation properties can offer financial benefits, equity building, rental income, and tax benefits. Structure the agreement using tenants-in-common or joint tenancy, outline a co-ownership agreement, and consider financing options like co-signing the mortgage. Manage rental income and expenses using tools like Google Calendar and property management software. Co-buying with friends for vacation properties like Tahoe can work well if everyone is aligned from the start.

Good luck!

@Archie Barrett

Just wanted to say that there are MANY reasons to consider a DSCR loan vs a conventional loan, not ONLY if you do not qualify for a conventional loan due to DTI.

Possible DSCR Benefits:
Can do cash out refi prior to 1 year seasoning of the mortgage
Can do cash out refi with no seasoning of ownership (with some lenders)
Can do a loan with much less paperwork (this comes more into play every time you add a property)
Can close on a DSCR loan directly in your LLC
Can have your DSCR loan not report on credit (depending on the lender)
DSCR loans can be cheaper than conventional loans for many credit scores and down payments. If you are not shipping DSCR loans every time you are making a purchase, you may be paying too much.
DSCR Loans can do 15% down with no mortgage insurance. Could be a savings depending on the scenario. 
DSCR Loans can finance property types that conventional loans cannot (non-warrantable condos, condotels, unique properties or mixed use properties...)
Jay was going to say those things as other Ifs i am pretty sure!