All Forum Posts by: Daniel McDonald

Quote from @Sanket Patke:

@Daniel McDonald My HOA is 400 and they keep increasing it 2-3% annually so you are right. I am thinking that can be offset by increasing rent periodically at the same rate. I am a rookie so don't know much about duplexes in the area. Happy to chat. Are there any towns in MA or NH that you can recommend that would have a better cash flow and appreciation?

@Jesse Jamrowski 9% would come from someone paying my principal portion of the loan.

You’re not to far from me. All the surrounding towns are great appreciation but cash flow is definitely a struggle around here but if you house hack then you’re going to be less worried about cash flow because you’ll be living there. Always happy to chat about my experience. 

Yea it's true you need an excuse but the right lender will take care of that for you so you'll need to start having conversations with lenders and if they say you can't do it move on from then. I have two house hacks about a street away from each other just north of Boston and used an FHA on both. My excuse was needed more space cause we were working from home. So it really can be anything.

I'm near Burlington in Beverly. The thing that scares me about condos is the lack of control over the HOA fees. At any point though could increase high enough to where renting isn't feasible. Could you house hack a duplex in the area?

I totally agree and I think it’s going to start becoming a necessity. House hacking isn’t just for the rookie investor anymore trying to start a portfolio. With prices as high as they are and income not keeping up I think more and more families will buy property together. 

Really depends on your long term goals. If you are 100% sure you'll move there then I don't hate having a property lined up, as long as you swing it. 100/month isn't going to actually cash flow. YOu will likely lose that somewhere. But if you're living at home then it may be fine to build up the equity. But say you move there in a year and sell it you'd likely lose money. So I'd only buy it if you could swing the potential loss each month, you knew you were going to move there, and it fit into your long term vision. 

Hi @Felix Lilly, Congrats! I went to school at Northeastern so very familiar with the area. I am an agent and 2x house hacker just north of Boston. Always willing to help where I can! How familiar are you with that area? Single families are much less common, it's mostly multifamilies. Definitely a hefty price tag but if you can get something maybe on mission hill, you could easily rent it out to students forever. Really depends on the vibes you are looking for! Feel free to connect. 

Quote from @Shanequa J.:

I should have joined a team for a year to get more experience. I opted for a flat fee brokerage instead because keeping my commission was more important to me.

 That's a really interesting callout. Ya I do think the team is super important. 

It's amazing how many things you can do to be a successful Agent, but there are also a ton of things that are a total waste of time. 

Looking back at your first year, what do you wish you DIDN'T do? Or spend so much time on? 

Quote from @Benjamin Sulka:

Quote from @Daniel McDonald:

That does seem pretty steep and tough to do these days. I think a lot of people are going 2-5% these days. But it really is whatever makes you sleep at night. 

Could you self manage? That would knock out 15% which is a lot (PM and lawn care).

It’s not an exact science either. Over the last few years my repairs have made up about 3%, which I wouldn’t have known without living there. But my vacancy has been 0. Maybe instead what you could do is focus on building a big enough reserve while you are living there then lower those numbers a little bit when you move out. Like if 30k sitting in an account keeps you comfortable, get there as quick as you can then do smaller amounts? Just an idea. 

 Daniel,

Thanks for the insightful response!

I would be self managing for several years but threw that into my numbers so that the investment still makes sense when I do offload to property management down the line. 

I like the idea of building up a big reserve and house hacking will definitely help do this quicker.

 If you are planning on sef managing for a few years then you will likely be helped by increasing rents too! So when it comes time to give up that 10% your rents could be a good chunk higher. My plan is to self-manage my house hacks as long as humanly possibly. You will be shocked when you see how little management it requires. Of course if the goal is to build a big portfolio that's a different story, but definitely manage the first few yourself for as long as you can. 

What about in your own backyard?