All Forum Posts by: Derek Luttrell

@Don Aleshire I appreciate it! That's a good idea about the keyword alerts--that isn't something I have played around with yet. 

Since MFHs here are outrageously priced, I found the perk of starting young was that I have never not lived with roommates, so my house hacking came naturally. It's so simple in retrospect, but it's truly nothing I even thought of until finding BP. If your current life situation caters to having roommates, I say go for it. 

Hi All, 

I am 25. My first post on BP was six months ago. I closed on my primary 3/2 and rented out the other 2 rooms to roommates 4 months ago (before which I was paying $1000/month for downtown Chicago rent). In those 4 months, my savings have skyrocketed (house-hacking is the real deal) and I've been saving 75% or more of my take-home each month. This is excluding the 11% of every check I put into a company Roth 401k. 

I have pre-approval letters for $150,000 investment properties in hand, even after buying my 3/2 just four months ago. On paper, I feel loaded on all cylinders...with nothing to fire at. I upgraded to Plus on BP yesterday to get unlimited calculator uses, and I am dreaming of cash flow. My question is, how long did you take from the point of being ready financially to actually making your first real move? Maybe I'm impatient and should shut up since I just bought my primary, but I can't help but feel like I'm doing something wrong/am dragging my feet. I've spent the past three consecutive weekends driving around Chicago suburbs looking at duplexes in my pre-approval range. I want my "talking" to turn into "doing," and I don't quite know how to get there. 

Thanks for reading, 

- Derek 

I spent this weekend seeing three MFHs in person, and am trying to train my eye on how much various renovations cost. 

Your bedroom floors look great--did you do that (and the windows) yourself? How did you get an idea that everything would cost you $4,000? Where did you purchase your materials from? 

Have you done anything with the property's plumbing/electrical? I'm finding that MFHs can easily be 100 years old, and as far as I know those kinds of updates can run about $6,000 each. Did you find it necessary to update those before placing tenants? 

Sorry for all the questions, but I'm 25 with the savings and pre-approval letters in hand, and I'm itching to get started. 

@Christopher Blanco thank you. I've been hearing SDIRA all over BP, and need to educate myself more on that. I have a Roth IRA I contribute to with TD Ameritrade, but I know that's different.

@Cameron Pendergraft thank you for the insight. To be honest, throwing that much into my current mortgage doesn't feel right, considering I closed on it 3 months ago and there isn't any equity yet. This could be a viable plan to add onto the equity that my primary builds over the years, though. Like if I was just shy of 20% equity, but had enough in savings to get me there, I can then throw some cash at the principal in order to qualify for a HELOC.

@Matt K. thanks for the reassurance that I probably won't be missing out on much....assuming it only takes a few months to find a property. Not a bad idea to bank-hop a couple times in search of those promo bonuses. 

@Thomas S. after purchasing my primary, I'm pre-approved for another $120,000 at 4.75% interest and 25% down. I've got $55k saved up right now, which grows at a pretty solid pace thanks to house-hacking. 

In the immediate Chicago area where I live, the numbers don't make sense on multi units for how much they're being listed for. This weekend I am headed 30 minutes outside the city to look at a $70k duplex that would need $15-20k in TLC. 

@Thomas S. thanks for the response. I closed on my primary residence just 3 months ago, and am house-hacking through roommates (I'm 25). I wouldn't reckon a HELOC is really available to me quite yet, as I put down a small, owner-occupied down payment.

Do you have any secondary advice, given more details on my current situation? 

Hi Everyone, 

I feel like this is sort of a Catch-22 since, while searching the next (or first) deal, I feel like I'm losing out on potential interest while holding tens of thousands in a savings account (on top of 3-6 months of living expenses), but liquidity is also important to be a prepared buyer. Mentally, though, I also feel like holding a lot in my savings account is a motivator to step on the gas any get myself a deal, because the money is sitting there and waiting to be put to work. 

Once you have enough cash saved up for one, where do you stash it while on the prowl for a property? 

Thank you, 

- Derek 

If your lender lets you pay with a debit card and not just your bank account, you can use your credit card to load a pre-paid Visa gift card from the grocery store. 

I've paid rent this way back before I owned. My Amex gives me 6% cash back at grocery stores, so I would load up a gift card with $900, get $54 back through Amex, then use the gift card to pay rent until I achieved the sign up bonus I was gunning for. It was annoying, but I wouldn't have spent $3,000 in 3 months otherwise.