All Forum Posts by: Jefferson Smith

A "house hack" -- living in a 2-4plex and renting the other units -- seems like one of the very best ways to start. Defray living costs, get the benefit of the cheapest loans in nature, and get the benefit of appreciation from it all.

I support your instinct, for what that's worth.

Small multifamily for a good deal and a hired property manager is making me feel very grateful. 

Before that, I invested in a loca syndicated/partnered deal. Someone else did most of the work, and I had a chance to learn. 

House hacking: buying a 2-4plex and living in one unit, seems to be the most frequent favorite way for folks to start. (I would have, but wife not down.)

For a relatively new investor with about 300k in capital, what would be a moderately aggressive goal for monthly revenue generation within five years? 

The general goal is to build up monthly passive-ish revenue within the next 5 years, and wealth generation for the long term. (I do nonprofit work, and I want build up revenue for my family and retirement that will allow continue to do service-oriented work.)

I am willing to be active and have a network of relationships. I am not a handyman, but I am a lawyer by training and I've helped with somewhat complicated deals before. I live in Portland, OR, where property values have risen significantly since the crash. My full-time job keeps me busy, so I will be doing this in the evenings and weekends. 

As I do goal setting, what are some realistic scenarios, benchmarks, and targets to help with the goal setting? 

Here's the relevant link from the site Dani shared. https://accessorydwellings.org/2014/05/01/stradiva...

The average costs track very well with my experience.
-- My foster brother built a nice basement unit for about 50k. (lists avg. as 52k)
-- My good friends built a backyard ADU for about 120k. (lists avg. as 98k)

Interesting question. I’m curious too. Will pay smart responder in likes :-)

@Kevin Dickson pinging you with a DM so we can connect.

For the people who like the strategy, I think the answer is "both / and." You do need to build into your budget some carrying costs during the rehab period, before you get it rented. During that point, you won't be earning income. But after it's rented, it's both an income and accumulation strategy. 

My example is a somewhat modified BRRRR, but it might be illustrative: I bought a threeplex that only had two units rented and needed a lot of work. The "rehab" included a bunch of stuff including new roof, getting the third unrented unit ready, and improving an additional space to make way for a fourth unit. During the first months, it earned me no income. That said, the rent from the two tenants did help defray the carrying costs. Now, the property is fully rented (still going to do some more work), and earning income.

I have just begun the  process of refinancing. I intend to use the new/reclaimed capital to do another investment. After refinancing, the current (now) fourplex will (still) provide some income. And the equity will also (knock wood) be a tool for acquiring/accumulating property. 

(My modified version: 1) Because it wasn't vacant, the rent helped fund the carrying costs. My Rehab was slower. This might have costs to the speed of the next property, but 2) it meant that I got the benefit of the property manager's experience to inform the rehab. Together, we served as the general contractor.)  

Hope that helps a bit. 

Just bought a 4 plex. What made it worth it was the prospect for improvements that could increase revenue (in my case, fixits to turn it from a 3 to a 4 unit). 

Do you see opportunity for added value?

If you can’t get the revenue up from 2.3k, it’s not as much of a B-Rehab-RRR. 

Gotta add a vote for my old HLS prof Roger Fisher and “Getting to Yes.” 

It’s a book I would both reread (and have) and share with a counterpart to read. For a community like this, including lots of people who hope to collaborate, GTY provides a valuable framework. 

—Starting with interests 

—Exploring options

—Insisting on legitimate criteria 

Negotiating both for good results and for lasting relationships. I recommend it. It’s a quick and fun read. And authors Fisher & Ury spawned much of the modern scholarship on negotiation, so it’s foindational for other stuff you’ll read  

(I do want to read the FBI guy’s book that was discussed on the podcast.)

Net migration data would be helpful. 

(California has been near the top in incoming and outgoing in many different years. Interested in what net is now of CA and elsewhere.)