All Forum Posts by: Erik R Aho

I agree house hacking will be a great place to start. Remember fundamentals like choosing a desirable market and keeping some money in a highly liquid option as reserves like a high interest savings account that should be about 4-5% currently. Also, while living there, you may want to do some value add projects. Make sure they will get you a return on your investment. This last one is important. Make sure you can afford it even when the other portion(s) are not rented. Do not over-extend yourself and risk taking a large principle loss.

With all of that said, a househack gives you more control than most other options. You will likely be able to refinance in the next 2-3 years to a lower interest rate too.

If you're open to move in, I would still recommend house hacking even with a good amount of starting capital. Properties don't cash flow well in NY, but if you could buy a house, or better yet a duplex-fourplex with an FHA loan, live in one unit and rent out the others; well, it may not cash flow but it would be living for cheap and building equity as you do it.

 140K you can get 3 SF with 40k per, for about 100k each with 1200 1300 in rents, I just got two more, duplex with 18k in rent, under 100k full reno, SF 15k rent, under 80k, 

Good luck 

@Erik R Aho, Similar situation here, living in Los Angeles with outrageous prices. Last year, my wife and I had a 10% increase on the 2bd/2ba apartment we rented, pushing it to $4,080 monthly. That felt extreme to us, especially since our money was literally going into the ether each month.

We searched EXTENSIVELY for about 7 months, starting with Zillow and open houses. Eventually, we found an agent who helped us out. We put in multiple offers and were consistently outbid. Finally stumbled upon a house we absolutely DID NOT think we would buy. Listed for over 100 days with terrible photos. We submitted a low offer, expecting less competition...

...and, they accepted!

We bought it for $675k, negotiated down from $725k, with the seller covering closing costs. We caught a slight dip and locked in a 5.75% rate. In total, we paid around $35k with a 5% conventional loan, split evenly between us. Though not cash-flow positive yet, we're building equity.

Now, we're considering out-of-state investments, but only after establishing a home base first. Might be worth some more local digging for your first investment?

• Can you share costs with someone? A partner, potential roommates, family member?
• Can you jointly qualify with someone to increase your loan amount?
• Are you renting now? If so, I agree with others here to definitely look into House-hacking first. 

@Erik R Aho

there are lots of free, concrete steps you can take - 

1. call a few lenders.  talk through your situation with them. tell them you're not ready to have your credit pulled and you just want to understand what programs you might qualify for.

2. call a few agents.  explain your goal of house hacking.  see how they respond.  pick your favorite.  start looking at properties.  look at 3-5 properties every weekend for the next 6 months.

good luck

Good morning everyone, I finally completed step 0; build up my credit and save for a down payment. My current market is terrible, so I’m ready to move somewhere with more potential. I’m looking to speak to agents that have listings anywhere that can meet these following requirements: A class/ B+ neighborhood, no rehabbing necessary or only cosmetic, price no more than $250,000, and landlord friendly states only. I’ve realized that’s all that matters as every state has their own diamonds in the rough so I’m ready and willing to move anywhere. For clarification I do mean MF homes not renting out rooms. Thank you in advance.

 That's great, Erik. Have you considered investing in the Ohio market at all? The prices are very affordable here making cashflow attainable. 

 We can't rent by room in NY. Can get you in major trouble 

My dad has a ton of them:)

Because we house-hacked, put 20% down, and have stable w-2 income we were able to get a 30 year conventional with a 3-2-1 buydown credit from the seller. 

If you are a first time homebuyer you should take a peak at the loan products geared towards people in your position. You’ll likely have a lower down payment requirement (I am sure you will but as an attorney I am always skeptical of making and relying on definite statements, especially where I don’t know all the relevant facts). 

I know a lot of people that house hack with multi families but if cash flow and cost are a barrier and you don’t find room mates, look into a single family and treat every room as a “door.”  Obviously this means you are staying in or near your market unless you are willing to move.

@Erik R Aho as several have already mentioned, buy a 2-4 unit and live in one unit while renting the rest.

The experience from this will be more valuable than just about any college education!