All Forum Posts by: Colin Mills

 Thanks for your input! So you think that if I rented a room in my unit that would go straight to my pockets and not count as part of our joint revenue?

Fwiw this deal is in NYC and is likely to be cash flow negative for a few years until we can either raise rents or refinance our loan payments down. Here are some mock numbers on a deal I looked at recently to better explain:

We would purchase a 3-unit multi-family for $850,000.

Monthly expenses (including maintenance, vacancy, etc reserves): $7000/mo

Monthly rents: $6900

    - Unit 1: $2600

    - Unit 2: $2600

    - Unit 3 (my unit for the first year): $1700

At full capacity it would be just shy of breaking even, but I will be living in the third unit so net cash flow would be: -$1800

Now that may sound bad for your typical cash flow market, but I am actually halving my housing expense. Once we refinance (if the rates ever come down), and I move out, it will likely be quite cash flow positive.

So how would you split that monthly $1800 liability? Right down the middle? 

Another thought is what happens when I move out and into my next deal by myself? Likely I would still be property managing, but would no longer have the free living credit from this property. Would you recommend negotiating some sort of compensation at that point?

Hi all,

I am moving out of my current rental apartment in order to pursue a house hack. My landlord worked with me to help re-rent my current lease so that I would be free to go and buy a house. She was impressed with the plan and analysis I have put into the search so far and asked if I would want to partner with them on this first deal. I had not been considering a partnership, but I am keen on the idea because this could be a great way to reduce risk and come up with the down payment on my first deal.

Some key points of how we would work together:

- They want an equity partnership, not a debt partnership

- They live out of state and want to be mostly hands-off while I live in and manage the property

- They have decades of landlord experience and connections that could help me get started/mentor me

- Pursuing a 3-4 unit multi-family 

- I would live in one of the units, decreasing total rent revenue

- We would be getting an FHA loan

- We are in a market that would likely be cash flow negative for a few years (with a low down payment and high-interest rate)

The question stands, How exactly would you structure this partnership?

Some possible ideas I have thought of:

- I contribute the fair market rent for the unit I live in towards total revenues. If we make cash flow, after vacancy, maintenance, and capex reserves are filled then I take a 10% management rake before we split profits along the equity proportions. Also if I decide to rent out a room in my unit then that money is mine to use how I want.

- I don't contribute towards revenue from my unit and we split profits/expenses along the equity proportions. My management rake is effectively living for free. If I rent out a room, that also gets split evenly.

Hey @Waleed Abduelal, looks like I missed the last one. Would love to come to the next one. I imagine that is coming up soon?

 Thanks for the response, Harold! Sending you a friend request.

Hi all,

I have been looking to get some skin in the real estate game through house hacking a multi family home. Given NYC has such high COL it is a no brainer to have tenants subsidize my rent. So far I have been looking exclusively in Brooklyn -- focused on Sunset Park, Flatbush, PLG, and Bed-Stuy. These deals often don't cash flow (at least not right away and not with a 5% down FHA) and have high prices ($800k - $1500k).

Given this outlook I have started exploring across the Hudson. Jersey City seems to have much better rent-price ratios at much more affordable entry prices. Although, property taxes do seem to be considerably higher. Would love any feedback in the following areas between the two:

- General real estate experience in each area

- Cost of doing business (agent fees, closing costs, cross-state loans, etc.)

- Rent and Value Appreciation

- Other hidden costs in each area

- Legal hoops

- Taxes

Anyone have any advice on why I might go one way or the other? 

Hi all, 

My name is Colin and I am a 24-year-old software engineer working remotely from Brooklyn, NY. I have always been interested in owning property and the potential cash flow of renting it out, but always felt like that was a "someday" goal and not something I could tangibly achieve soon. I was motivated by the exorbitant cost of rent in NYC -- wanting to start putting my rent money towards equity, rather than lining another investor's pockets.

After picking up Brandon Turner's, The Book on Rental Property Investing, I have been sold on the idea that my only limitation is me taking the first step. Given the barrier to entry is so high in this city, I am hoping to find a house hacking deal (likely accompanied by an FHA loan) that will empower me to live for free so I can further build up my wealth to take the next step.

Although I am early on in my investing career, I am interested in building a network of real estate investors who have been down this same path. A few areas that I am specifically interested in are:

- Getting started investing in high COL areas

- The ins and outs of purchasing property in NYC

- Building the right team

- Leveraging FHA and other first-time buyer programs that I might leverage

- Meeting and building relationships with local and distant investors