All Forum Posts by: Eric Piccione

My wife and I are getting our feet wet in real estate. We want to house hack potentially through airbnb. We would like to live on the second story and close it off from the guests (vampire style) What are some criteria when looking for an airbnb that should be considered? We have found some great areas with great potential but are unsure of what to look for in an airbnb property. Any and all tips would be appreciated! Thanks in advance everyone!

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Originally posted by @Account Closed:

@Eric Piccione Hi Eric, I house hacked a duplex in Cleveland Heights and my monthly payment was a little smaller than that but I wouldve also done it at your rate or some more. It sounds good (assuming the house doesnt need major immediate repairs/new large ticket items immediately). It took us a while to find our house hack too so i hope you finally found yours! good luck and feel free to reach out.

Yeah, they just replaced the roof/windows/siding. That gives us a buffer of 10 years on some of the biggest items. Our offer includes random "oh Sh*t expenses" in case anything out of the blue happens. Hopefully all goes well! Fingers crossed!

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Originally posted by @Michael Noto:

@Eric Piccione Assuming the market rent for a comparable apartment is a lot more than $460 a month and that the area is good like you mentioned I would pull the trigger. Take a step back and think, you are going to live for $460 a month? How awesome is that? Don't overthink it because like you said there is value in locking down a deal in a good area when you don't know when the next one will be available.

Truth, yeah we would be more than fine with anything less than market value. It is just a matter of if the seller accepts our offer. Fingers crossed on the low ball offer!

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Originally posted by @Nicole Heasley Beitenman:

I house hacked a SFH for 3 years. The rental income covered mortgage, taxes, and insurance. I didn't really care about the rest because I was going to incur those costs whether someone lived with me or not. It worked out SO well.

I cannot emphasize @Tim Herman's advice enough: run the numbers as if you aren't living there. I knew nothing about REI when I started hacking; I just needed a way to cover my student loans. No regrets, but if I had known then what I know now, I would have bought differently. I still own the property, but because my interest rate sucks and the taxes are absurd in Cleveland, it only cash flows like $67 a month after reserves. And that's without property management.

No problem, how did you find the people to house hack with? Friends, strangers? I tecnhically house hacked in college but as an adult it seems so much different now haha.

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Originally posted by @Marcus Auerbach:

@Eric Piccione difficult to give you a specific answer without knowing the specifics like location, price range, rents, age and condition of the property. Tim is correct, your spreadsheet is as good as your WAG - lol. I work with a lot of house hack clients and in Milwaukee your out of pocket would be about right for a duplex on the desireable East Side close to the lake.

Typically that would be a $275k-375k purchase price depending on condition, rents between 1400 and 1700 depending on number of bedrooms, square footage and condition of kitchen and bath. The housing stock here is typically about 100 years old and many of the properties need lots of updates, windows, siding, kitchens, baths, HVAC, new plumbing, new electrical, sometimes no garage etc..

For a house hack it's often better to buy a more expensive place, that has many upgrades already done, as you are likley buying with a low down payment and can amortize the higher cost over 30 years. If you buy a cheaper property, it will consume a lot of cash over the next years in capex. For a ballpark WAG lol use $35 per square foot of living space. An experienced agent should be able to help you asses the condition of the property before you make an offer and doublecheck your assumptions on rents.

Bottom line, $460 is not so bad and would be typical for what I have desribed above. How does it compare to rent? If you would have to pay $1500 to rent something comparable it's a no brainer, if your rents are $900 different story. $800 in cash flow after you moved out is pretty awesome if its true; with PM and fully loaded you should reasonably expect $200 per door.

Fingers crossed on everything working out as we hope. Being able to cash flow this even at $400/m after leaving still puts us in a great spot down the road. It just comes down to getting very specific with our numbers. God speed, hopefully this works out!

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Originally posted by @Tim Herman:

@Eric Piccione what do the numbers tell you.Run it as if you are not there. Does it cash flow taking into account vacancy,repairs,capex. Some high cost of living areas never cash flow and are appreciation plays. You can use a spreadsheet in the files section or use BP calculators for 5 times. Capex is the most underestimated expense beginning investors make. Until you post numbers it is WAG(wild a** guess).

Our cap ex net is going to be $200/m when we leave we will definitely be cash flowing $400+ but for now, we might be paying in the ballpark of $500/m

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My wife and I are planning on house hacking a duplex property. When it comes to covering the mortgage, the property would do just that. When we ran the numbers, the insurance, vacancy, repairs, property tax, and any other expenses run us approx $460 out of pocket. Would this be a good amount of money to pay out of pocket in a nice area, that is close to work. Realistically, we would stay in this house for a year, move out, and repeat the process. So that out of pocket expense would then bring in around $800 in profit. Is this worth it, or should we keep looking? The main concern is it took us 2 months to find a property with all the right criteria, so we do not know when the next opportunity will come up. Any advice would be super helpful!

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We found a great duplex to house hack right next to work. It is listed at market value but apparently cash flows great. My questions are:

1 It is very last minute and did not have a proper chance to let our realtor know about this. However, it has been 2 days since he responded so I do not have an agent to go with. Is going with an agent of your own a recommended thing to do?

2 Is buying at market value okay?

3 Most of the comps are taken care of since this home is a 2006 home.

4 the other two duplexes were listed 5 days ago and are already pending. How much further research is required before pulling the trigger?

5 When it comes to being prepared, what things should we bring to the open house?

6 Should we let them know we are looking to house hack?

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It is clear that neither method is perfect, however we want our first investment property to mainly be a cash flowing property. Appreciation is great, but for a house hack, we came across a 2005 home that does not have as much appreciation potential as we would want. However, it is in a great location and is affordable. The listing is a 230k duplex and projected income of 1160. The PMI is 106. Given the 50% rule, this should cash flow $474 clean per month (1160/2-160=474). However, given the 2% test, the numbers work out to 1160/230000= .005 or .05% (not good) So am I doing something wrong? This seems like a good deal but i'm not sure if the numbers are agreeing with me. Could someone help me with this dilemma?

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Originally posted by @Jared McCullough:

Originally posted by @Theresa Harris:

@Eric Piccione Look at the building as a whole. Rent is $5425, mortgage is $4355. Now add in property taxes, vacancy, repairs and maintenance. Who pays for utilities?

The way I read his post was the P&I of $871 was for the whole building not per unit. I may be wrong but even looking at his calculation that is what I inferred.

Just so we are clear, I do not own this property. I was trying to figure out if you do P&I per unit or on the building as a whole. Same question with a package of condos.

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All Forum Posts by: Eric Piccione

Eric Piccione has started 43 posts and replied 87 times.

Post: House hacking through airbnb? What criteria to look for?

Post: What is a good out of pocket payment per month for house hack

Post: What is a good out of pocket payment per month for house hack

Post: What is a good out of pocket payment per month for house hack

Post: What is a good out of pocket payment per month for house hack

Post: What is a good out of pocket payment per month for house hack

Post: What is a good out of pocket payment per month for house hack

Post: Open house for a Newbie. Need some help!!

Post: 2% test or the 50% rule?

Post: P&I for each unit on a duplex?