All Forum Posts by: Jim D.

In my state, landlords who own three or less properties are for some reason allowed to discriminate on almost every category (except for race and a couple others). When I owned just a few properties I was able to legally discriminate on family status. Check your local laws and see if you have something similar there and if it applies in your case.

Buy. 

I chose a mediocre house for my first house hack and my maintenance costs came in waaay over what I expected. But the fact that it got me started was worth more than anything else, and it taught me how to hit the next purchases out of the park. 

You won't regret getting started (except for that time when your head has been stuck under the sink for 2 hours and you can't get the $*#% pipes to stay together without leaking and have driven to Home Depot 3 times but can't bear hiring a plumber for something so small and your roommate has a hot friend over and when you look over towards her, nasty drain water drips in your ear and you bang your head on the bottom of the sink). Go for it!

I signed up to have Zillow automatically email me a summary of my home values every month. I keep the monthly emails coming just for the entertainment value. Last month, one of my houses went up by $90k, only to drop down by $80k this week.

Should've sold last month I guess.

When I was house hacking and finding roommates, I actually never ran credit checks as I felt like I could tell what kind of people they were just meeting them (never got burned, but could have). 

Smartmove is an easy way to run background/credit checks that's worked for me since then.

I would echo the advice to buy a quality used car in the 5-10k range and invest the rest of the money. As a side note, anytime you see lower than 5% interest on consumer products like cars, jewelry, solar panels, whatever... it is always done by the retailer increasing the price and using that money to buy down the interest rate. So you're not actually getting a great rate or great deal--you're paying for it in the purchase price. The supposed "cash discount" is just them not incurring the financing fees to buy the rate down. Typically costs about 5% extra to buy the rate down to 0% for per year.

I have lived in/rented a house with the exact setup you described. MIL's are awesome! 

The rental rules will just all be local, so you'll want to call the city and see. But everywhere I've lived allows you to rent this out as a separate unit as long as the owner (you) also lives in the home. All the standard rental rules should apply. Just use a standard lease.

Also check your local laws on this, but where I lived, the rules stated that if you were renting out part of your personal residence, you are allowed to discriminate based on family status and other things that normally are protected classes. (However, certain things like race are always protected classes.) This only mattered to me because I learned that having families with toddlers living in the unit above me was not pleasant, so after that I always chose single renters. Check and see what the rules are in your area.

Enjoy paying hardly any mortgage payment!

I would sit down with the lender you want to use for the cash out refi, and review the plan with them. You'll want to see how your DTI ratio and credit score will be impacted by the credit cards.

For the DTI ratio, the monthly payment due on a credit card is usually 1% of the loan balance, so if you have $30,000 on the card, your monthly payment would be $300. You'll want to factor that number in to the total DTI calculation to see if you'll have enough room to qualify for the new loan payment.

With regards to your credit score, that's harder to calculate. If you make the monthly payments on time on the credit card, that won't hurt you at all. However, another major component of credit score is what % of your revolving debt is in use. They like to see less than 20% of available credit utilized. If you're maxed out at close to 100%, that will have a negative impact on your score, though I don't know how much. Your lender may be able to give you an idea.

Hope that helps.

When I've dealt with this, I just took an average of the past few years' usage and had the tenants pay it as a fixed amount. I didn't want to have squabbling over who is using more power and who should have to pay more, etc. The risk here is obviously that since they are paying a fixed cost for utilities, that they will run up the bill, but I have never had that happen. The best thing about this solution is that it's free.

When I started house hacking, the toughest part was having my friends go from being my roommates to my renters. Good on you for taking the initiative.

Congrats on the purchase! Props to you for taking action and pulling the trigger; sounds like you found a good deal. In the future, I would always have your funding arranged BEFORE making the purchase. 

If you borrow money from friends/family for the repairs, the most simple way by far will be to treat it like a loan and pay them interest. The amount of interest is all up to negotiation, but I would expect to pay over 10%. 

If you try to structure it as a profit-sharing once the house is sold, or give them some ownership in the house in exchange for loaning you money, things will get messy and complicated very fast. Not recommended.

Good luck!