All Forum Posts by: Connor Lewis

I will soon establish an LLC and open a business account to track income and expenses through that, but in the meantime I'm unsure of how to properly track expenses for the rehab. I know not to comingle funds with my personal checking account, so in the meantime should I just open another checking account and utilize that for the property? I appreciate all advice from those who have done this before! I want to make sure it's not a headache for my CPA. Thank you for your responses!

2 Votes

Quote from @Marcus Auerbach:

Congrats on the plan, complete no brainer. The worst house hack in town still beats a single family home by a long shot. We do a lot of house hacks with clients in Milwaukee and I don't know the Lexington housing stock, so not sure if what I can tell you translates well.

- Make sure you buy in a quality area; you can leverage your low downpayment to stretch much more than you could with an investment property. Long term it will perform much better

- Buy a large building! The biggest mistake I made when I bought my first duplex (as an investment back in 2008) was that I did not understand the importance of square footage! People always look at the bedroom count, square footage is more important for your long term income

- Buy with a 5% down no PMI loan rather than an FHA. Most FHA offers I see on my listings are higher thna conventional offers, buyers try to overcome the FHA stigma with a higher offer price

- If you can remodel before you rent; you will attract much nicer tenants. Do as much as you can, at the very least clean the heck out of the place and paint it. New flooring is great. Best would be a new kitchen and bathroom. The ROI will be slow, but better tenants and long term it pays off!

Get the book on hosue hacking, I believe it's here on the BP book store. You can also find some info on YouTube - look up: house hacking Milwaukee.

Thank you for the advice! I've never heard of the 5% down, no PMI loan before. What are the qualifications for that loan?

0 Votes

Hello BP community!

For those of you that have house hacked before, what advice would you give to someone that's about to start doing so? My wife and I will be purchasing our first property this year, which will be a house hack, so we're searching for advice. Thanks!

4 Votes

Hello everyone!

I'm a new investor in the Lexington, KY area and am seeking to start "building my team". I'm looking for professionals that have dealt with real estate investing before and are familiar with the area. I'm looking for a realtor, real estate lawyer, lenders, etc. For those in Lexington and the surrounding areas, would you mind recommending some people to me? Thank you!

0 Votes

Lexington-Fayette, Kentucky

Quote from @Mark Jones:

Sorry I wasn't clear. I understand how the rule works. I'm asking for the math on why 1% as opposed to 1.5 or 2%

Hey Mark,

The best explanation that I've heard is from Brandon Turner. He commonly refers to the 1% rule as more of a "1% test". Changing the way you think about it may help to answer your question. From the perspective of looking at it as a test we can focus on the "why is it 1% rather than 1.5 or 2% ?" When looking at a potential deal, taking 1% of the PP and making that value your rent should result in a positively cash-flowing property. So the test is analyzing the market rent, taking that value, and dividing it by the PP. The closer to 1% that value is, the more likely the property is to cash flow. 1% is used because even with the expenses on the property (like your mortgage and repairs) it will still result in a positive cash flow when the rent is close to and greater than 1%.

0 Votes

All Forum Posts by: Connor Lewis

Connor Lewis has started 11 posts and replied 16 times.

Post: Expense Tracking for New Investor

Post: Expense Tracking for New Investor

Post: House Hacking Advice

Post: House Hacking Advice

Post: Building a Real Estate Team

Post: 1 percent rule question