All Forum Posts by: Daniel Vallejo

Hey Tristan,

I'm doing a house hack myself currently. But I want to give you a different perspective to look at a house hack rather than seeing a CoC return. Ultimately, calculating cash on cash returns for a property consist of a few variables. And one of those variables is initial investment. Since you will be paying partial of your mortgage that initial investment turns more into a holding cost that changes for every dollar of your own money that goes towards the mortgage. Therefore, CoC at the first month wont look as great at month 10, 11, 12 and so on.

So I am looking at my own house hack strategy as Bill is referring it to, which is to get my own living expense as close to $0 as possible. Then that would free up the rest of my W2 income to put into the next property. 

Hope this helps! 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $450,000
Cash invested: $35,000

Turned Garage to ADU, house hacking and living in ADU while renting the rest of house. Monthly out of pocket loan cost after rental income from the primary home, $150.

What made you interested in investing in this type of deal?

Needed a home that I could own and be able to rent out part of it to live there for a very low cost.

How did you find this deal and how did you negotiate it?

MLS. Took a contractor with me to give me a bid for everything that needed fixing.

How did you finance this deal?

FHA loan 3.5%

How did you add value to the deal?

Converted extended living into ADU. Rehabbed kitchen and all rooms.

What was the outcome?

ARV $580,000

Lessons learned? Challenges?

Landscaping is expensive and gets ruined really fast if not properly maintained. Will be doing artificial landscaping moving forward unless it’s a flip.

Hi Everyone, 

I am currently working on converting my Garage into an ADU of 450 sqft. The space has already been permitted to be an extension to the living room back in 1984. Now I'm closing that off and creating a 1B/1B. My question is in regards to the type of finish work I should go with to be able to execute two strategies efficiently in case one fails. I'd prefer to go the short term rental route, but if for some reason the property doesn't perform well as STR I'll go the long term rental route. Kitchen - Countertops - Showers/bathrooms - Flooring - what finishes can I use that will maximize my cashflow for STR but will not break the bank in case LTR strategy must be implemented?

First time posting here, so thank you for your time and help!