All Forum Posts by: Dennis Bragg

Hey Joanne, you’re definitely onto something with room rentals.. it can be an excellent strategy for offsetting a hefty mortgage and, in some cases, bringing in higher total rent than a single lease. I’ve been around real estate for decades, and I read in The Economist once that in lively markets like Charlotte, folks will pay a premium for a comfortable room if you’re near major employers.

A friend of mine tried something similar out in Austin a while back.. he’d inherited a 4-bedroom property and split it into individual room rentals. At first, he was anxious about having multiple tenants under one roof, but with the right house rules spelled out up front, it turned into a solid monthly cash fow for him. One key he found was mixing a welcoming atmosphere with firm guidelines.. it typically falls under standard tenant landlord laws for eviction.. so you’ll want to double-check local regulations.

You mentioned Furnished Finders and Padslipt.com.. from what I’ve heard, those can be great if you’re targeting traveling professionals or short term visitors. Sometimes, the more old-school approach like posting on local community boards can help you find reliable tenants. A well connected agent can also tap into their network.. for instance, probate attorneys might know of people seeking short-term solutions. Of course, all channels can work.. it’s just that certain ones might be better for your situatoin right now.

Since your Charlotte mortgage is higher, renting by the room can spread that burden across multiple renters. If you’re feeling uneasy about the potential headaches, you might consider a local property manager who specializes in room rentals or shared housing. So, here’s my question.. do you think you’d be more comfortable taking the DIY approach with strict guidelines, or might a property manager give you the peace of mind you need?

Hey Eric, appreciate you laying out the journey.. sometimes, real estate can feel like a marathon where every mile has a new surprise, rght?

You hit on a tough reality.. inheriting tenants who aren’t prepared to pay on time can be one of the biggest curveballs for a landlord. A buddy of mine up in Omaha once inherited a tenant who refused to let inspectors through the door.. ended up pushing back renovations for a month and racking up costs like you wouldn’t believe. It’s humbing and frustrating, but it also teaches you those guardrails you’ll want next time.. like thorough screening, a solid lease agreement that sets ground rules upfront, and maybe even setting aside a bit more cushion in reserves.

Chicago’s got plenty of investor-friendly pockets. I saw an example recently in Bloomberg about how local regulations can really shape a landlord’s experience, from what I’ve heard. Having an agent who also networks with local probate attorneys can open doors to deals. Sometimes, I see investors lean into property managers who know the landscape and can “drive for dollars” around the block. Of course, all channels can work.. from seller financing to foreclosures.. but from my 30+ years in real estate, I’ve found focusing on cash flow analysis tends to pay off more reliably.

So here’s the big question that might help steer your next steps.. what do you think would make landlording less stressful for you.. a property manager, or maybe a smaller property until you get more comfortable?

Hey Josh, thanks for jumping in with such a bold approach.. it’s not every day you see someone your age pushing for a luxury twist on a single family rental. First off, I really like how you’re thinking beyond just the renovation.. you’re creating a tailored investor strategy that builds excitement around upscale features. Palm Coast might not have the flashy reputation of Miami, but there’s a lot to love in that area’s growth potential.

I’ve been around the real estate block for a few decades, and one thing I’ve seen is that luxury rentals can thrive when they’re more than just “pretty”.. they need staying power. My firend once had a client who did a high end remodel in a somewhat modest neighborhood. He worried the upscale kitchen appliances and designer finishes were too much for the area. Turns out, the right marketing found renters who appreciated the quality and were willing to pay a premium. There’s huge retal income potential if you nail that balance between improvements that wow tenants and improvements that merely look fancy but don’t justify higher rents.

I’d also keep an eye on how your high end plan fits the local demand. For instance, in places like Austin or Chicago, I’ve noticed similar deals pay off when you have the right property management systems dialed in. In Phoenix, where I’m based, or in markets like San Antonio, the best realtors do more than just list properties.. they go “driving for dollars” to find oppurtunity, leverage their local networks (probate attorneys, CPAs, divorce attorneys) and carefully analyze each property’s cash flow. Sure, all channels can work, even seller financing or foreclosures, but in my experience, a well-connected agent can uncover hidden gems that often outperform the trickier avenues.

Since the post is still fresh, I’m curious.. do you foresee other potential add ons that might elevate the returns even further, like corporate housing partnerships or short-term seasonal leases?

We would be happy to help you out - a few of our investors have properties in College Station. I will send you a PM.

Hi Yooni,

Congrats on taking the leap into real estate investing! House hacking is a fantastic way to start building wealth while minimizing risk. Back when I started investing, I found it helpful to prioritize understanding the nuances of each market, and Pittsburgh is a gem for steady cash flow opportunities.

Here’s the deal: a $100 monthly cash flow might seem underwhelming, but context matters. If you’ve got strong tenant demand, proximity to top employers, or even access to public transit, you’re laying a solid foundation. Plus, small cash flow can compound over time. One of my early properties barely broke even, but after a couple of years, rent hikes and expense optimization turned it into a strong performer.

For cash flow benchmarks, I usually aim for $200-$300 per unit, but your situation.. house hacking.. offers unique benefits like reduced living expenses and quicker equity buildup. One friend of mine house hacked a duplex in Pittsburgh, initially making just $75/month after expenses. Today, she’s cash flowing $400/month per unit, thanks to strategic updates and rent adjustments. That also happens here in San Diego all the time, btw!

Remember to account for potential surprises. Set aside reserves for unexpected repairs or vacancies. Also, neighborhoods matter. Areas like Lawrenceville and East Liberty have undergone huge transformations.. it’s worth exploring how those shifts could affect your property’s future value.

What’s your take? Any properties catching your eye? I’m curious to hear how you’re narrowing down neighborhoods.

Carlos, that’s a jaw-dropping figure… $563,313 in interest paid! Let’s break this down because there’s a lot to unpack here.

The real question is, how well is that debt working for you? If your properties are generating solid cash flow or have appreciated significantly, you might be following a “smart leverage” strategy, à la Grant Cardone. But if those payments feel like dead weight, Dave Ramsey’s “debt-free” mindset could be worth revisiting.

Here’s a quick story to illustrate. A friend of mine, Ryan, who invests heavily in Baltimore, realized his interest costs were eating into his cash flow. He took a hard look at his portfolio and noticed a few underperforming properties. After selling one and using a 1031 exchange to buy a fourplex in Chicago, he reduced his interest burden by 20% while boosting his net incomes by $1,500 per month. It wasnt an easy decision, but he’s now breathing easier with stronger cash reserves.

Another thought: refinancing. With rates in constant flux, you might have opportunities to lock in lower ones. From what I’ve read in Bloomberg, certain markets like Austin and San Antonio are still seeing solid appreciation despite higher rates... Have you looked at how much equity you’ve built up? Sometimes tapping into that equity for a strategic reinvestment can pay off big.

How do you feel about your portfolio’s performance overall? Any properties you’d consider swapping out for higher-yield options?

Hey @Morgan Iacolucci, @Pat Aboukhaled has some great insights here, and I really agree about locking down that buy-back clause right away. It reminds me of a project I helped with in Sacramento.. The seller wanted a buy-back, and we added a clause that reimbursed not just for upgrades but also factored in market appreciation tied to the improvements. That clause avoided a lot of headaches when the seller eventually exercised their option.

Seattle permitting can really be a curveball. From what I read in Bloomberg, delays in high-demand areas have gone up significantly in the past year. If your tenants aren't looped in early, it could make access for inspections tough. Have you thought about how you’ll balance those dynamics? And, considering market shifts.. what’s your approach to minimizing risks over the next two years? 

Hi @Sharad Bagri

It’s great to see you considering liability coverage right at the outset of your partnership investment.. that’s a proactive move many new investors overlook. Umbrella insurance can be a smart way to shield yourself and your partners from potential risks that basic policies might not cover.

From what I’ve heard, local insurance agents familiar with investment properties in your area are a great starting point. When I partnered with friends on a multi-unit property a few years ago, we chose individual umbrella polcies from our personal providers. Companies like State Farm, Allstate, or Chubb often come up in conversations, but comparing quotes with independent brokers might give you the best value.

Since you're in a general partnership, it”s critical to clearly define liability exposure. The type of property can influence the risks you face, so coverage limits matter. A friend of mine recently got a $2M umbrella policy for around $300 annually by bundling it with home and auto insurance; it’s worth exploring.

Out of curiosity, are you primarily investing in residential properties or venturing into commercial spaces? That could help guide what type of companies to explore a little further.

Looking forward to your thoughts!

Great to meet you @Christopher Jennings - I see that Pat has already commented, she's a fantastic resource to have in your new backyard. We have worked closely together on several occasions and she's been fantastic!

Pat, I couldn’t agree more with your point about comparing permit processes in different parts of the Valley.. I’ve watched investors lose momentum by sticking to a single city’s slower regulations when a neighboring municipality was more open to new builds. My dad and I got caught by that snag on our third flip years ago, and we definitely kicke ourselves for not doing a little extra research up front. We’ve since learned that scouting friendlier permit offices not only speeds up timelines but can also reveal unique neighborhoods with underappreciated potential.

Chris: Are you planning to focus on Gilbert exclusively, or do you see yourself venturing into other Phoenix areas soon?

Hi @Chris Agun

Happy New Year! You’re in an exciting spot. With fully paid-off properties and significant equity, your options are wide open.

I had a friend in Connecticut who ended up investing in Phoenix and he was in a situation much like yours - an inherited property and equity to work with. They used a HELOC to finance a multi-family purchase, which allowed them to make staggered acquisitions and keep cash on hand for renovations. It's a move that worked out exceptionally well, especially in a growing market like Phoenix.

Here’s how you could approach it:

Unlocking Equity:
A HELOC is great for flexibility, while a cash-out refinance might be better if you're aiming to make multiple acquisitions quickly. It really depends on your tolerance for risk and how much liquidity you want to maintain.

Researching the Waterbury Market:
Waterbury has shown solid potential for multi-family investments. I recently saw someone turn around a three-family property there by targeting tenents like teachers and nurses.. stable professionals who value quality housing. The problem you may run into is the lower appreciation rates compared to the South.

Considering Commercial Real Estate:
Have you looked at mixed-use properties? A friend of mine invested in one last year—apartments upstairs, a small coffee shop downstairs - and the combination of income streams made it a steady performer.

Scaling with a 1031 Exchange:
While not applicable unless you sell a property, planning for a 1031 exchange could help you scale quickly while avoiding capital gains taxes. For instance, one investor I worked with used it to jump from a duplex to a 4-unit building in Phoenix, effectively doubling their rental income as well as the forecasted appreciation rate on their new property. It's a little harder to cashflow here in San Diego, but it's possible with the right team in place!

By the way, Phoenix’s rental market has been on fire lately, with a mix of strong appreciation and reliable tenant demand. I’m curious - are you leaning toward staying local in Connecticut, or are you open to exploring oppurtunities in out-of-state markets like Phoenix?