All Forum Posts by: Dan Keefe

Depending on the amount of equity that your partner is willing to "take out" of their personal home, there may be no reason to house hack.

$600,000 can conservatively get you a portfolio of $2,400,000.

My advice:

1. Start small...just because the $600K can buy a $2.4MM property, doesn't mean you should. Start with a smaller property (2-6 units), that has some value-add potential. Work through the project, get the units filled and build confidence in both your partner (and yourself). Maybe even consider partnering with someone more experienced to expedite your learning process. 

2. Grow exponentially. Now that you started small, updated and stabilized your first property, you should feel comfortable doing what you did before but on a larger scale. Don't rush this process, but now you can look for a property (or multiple smaller properties) that could triple the size of your portfolio. Work through these projects and you should have a sizable amount of equity to either continue growing or to buy-out your partner.

3. Don't be greedy. Be realistic, your partner is fronting essentially all of the money so they should get a majority of the returns. Yes, you may be doing the work, but that wouldn't be possible without them. Treat them fairly and you'll have a partner/resource for life, give them 70-80% of the ownership, and remember, 30% of something is better than 100% of nothing. 

Feel free to message me if you would like to speak about this more. I'm always excited to speak to other investors!

@Dan Keefe,

You're in a very exciting position-house hacking already in progress, a motivated capital partner with a paid-off home, and solid savings. That combo gives you a lot of flexibility and options. Here's how I'd break it down:

First: What’s Your Main Goal?
Cash flow today?
Equity growth?
Scalability for the long-term?

Since your partner is looking for passive income and you're willing to be active, your structure could work well with the right investments, but minimizing risk is key, especially when leveraging a HELOC.

My Take on Your 3 Options
1. Wait for 5% Down Primary Purchase + Use HELOC for Rehab
This is the most strategic low-risk play.
Leverage your FHA or conventional loan for cheap entry
Use the HELOC like a BRRRR fund—to renovate, then refi and pull cash out
Add real value by targeting a light to moderate value-add multifamily
Ideal for your partner since you’re creating equity + cash flow with controlled downside
Rating: 9/10. Best balance of control, upside, and risk.

2. Use HELOC to Add an ADU and House Hack Again
This works if local zoning supports it and you’re committed to staying in the area.
Great long-term value-add to a property
More passive cash flow for your partner
But slower returns and harder to scale fast
Rating: 6.5/10. Solid but more of a legacy build than a growth engine.

3. Foreclosures & Auctions
This is high-risk, high-reward, especially without deep local market experience or a trusted boots-on-the-ground crew.
You’ll need cash fast (HELOC helps), but risk of unseen repairs or title issues is higher
These are great once you’re more seasoned, but could derail a good partnership early if things go wrong
Rating: 5/10. Be cautious. This path needs a strong team and high tolerance for risk.

Bonus Option: Turnkey Rentals in the Midwest or Southeast
If you want predictable cash flow, low effort, and scalability, this is a smart option to consider.
Your partner’s HELOC could fund multiple down payments on properties that are already rehabbed, tenant-ready, and managed.
You focus on acquisition + portfolio building, while your partner sees returns without the headaches.
Markets like Indianapolis, Birmingham, Cleveland, Columbia SC consistently meet cash flow metrics and are landlord-friendly.
Rating: 8.5/10. Especially good for your partner’s passive income goals.

What I’d Do in Your Shoes:
Short-term: Pursue the 5% down multi-family purchase, use HELOC for rehab/BRRRR, and house hack again.

Mid-term: Use HELOC leverage for 1–2 out-of-state turnkey properties to add passive cash flow without you being stretched too thin.

Long-term: Build systems, team, and passive income streams for your partner while gaining experience and equity for yourself.

Let me know if you want help modeling cash flow or comparing markets-I’d be happy to run numbers or share insights.

Best of luck,

Melissa

Hey @Dan Keefe, feel free to PM me so we can hop on a call. I personally like the ADU idea if zoning permits you to build one. You also have a few different options on the second house hack as well. Happy to help.

@Dan Keefe why not start with a conventional loan. They just changed the rules and allow 5% down on Triplexes again!

Another reason I suggest that is because refinancing in a year will require a lot of cash from you. Appreciation will not be enough in one year for you to refinance that as an investment property at 75-80%LTV. You'll be stuck with the FHA and the PMI until you have 75to80% LTV or bring the cash to make that true. PMI is not that big of a deal for a couple years but if your plan is to refinance in a year that will be difficult or take a lot of cash on you end.

 Clark Fulton has got a ton of headaches. It's a low income neighborhood, it's got old housing stock and a ton of crime. That said, I think it's the most promising low income neighborhood in the city of Cleveland. So if you are down to sign up for these headaches this is the place I'd recommend doing it.

I would look on the east side and look at areas closer to Shaker Heights.  

@Dan Keefe Clark-Fulton is hyped up because of MetroHealth so the prices in the area are over inflated due to potential gentrification. $200k will go a lot further in other areas of the Cleveland market. 

I'm a realtor in this market. Clark/Fulton area is economically challenged and not the safest. For the capital ($205k), I would consider other areas.