All Forum Posts by: Jon McCarron

Also, this would be long term for your real estate agent career, but build your network now while at school! Meet as many new people as possible and make connections! I regret not joining more clubs, or attending networking events.

Most of those people will stay within Massachusetts, and could be good future clients. It helps if they already know someone who is a realtor that they know, like, and trust!

Again, good luck!

Hi @Rachel House

UMass alum here! Congrats on thinking about making moves in real estate while still in school. I wish I was thinking that way during my years there ('07-'11). Could have been great I'm sure!

For buying a home, I would connect with a lender, and figure out where you stand, or what you could be doing to be in the position to buy a home/condo/multi family out in Amherst. I bet you could find a couple of local banks and credit unions in western mass that might be more in favor to help you figure that out, rather than the bigger regional and national banks. Also, I know it is probably demanding, but keep that job as a server, that at least shows you earn income when trying to qualify for a loan.

I think for generating income with use of your license, you should join a team in that area. You might be able to help out on deals even if you aren't necessarily sourcing the deals yourself. You might also look into marketing yourself as a rental specialist (even though that might be very seasonal), could be a good burst of income in the spring when students are looking for off campus housing. 

Good luck!

Hi @Jessica Lohr

I like the towns of Beverly and Salem on the north shore. Both towns have Colleges/Universities, train access to Boston, and a mix of people who work locally and commute to work, so there is always a solid and diverse renter population. Both have fun downtown areas and beaches.

But, I think your goal for deciding where to house hack comes down to a couple of things: 

1) Will the house hack drastically lower your housing payment?

2) Are you buying to start a portfolio? Or are you trying to be able to afford the place where you want to live? Two different strategies and comfort levels

I have done 2 house hacks in the Beverly/Salem area. The 1st was a 2 family. My wife and I came out of pocket about $150/month to cover the remaining part of our mortgage. We now rent out both apartments and make around $1700 over our mortgage.

The second on paper does not look great. It's another 2 family. We come out of pocket $1350 a month. It is however a more affordable option for us than renting, or buying a single family home in the area. We had our first child a year ago, and needed more space. The apartment we occupy now is a 4 bed 2 full bath unit. That would probably be between $2800-3400 a month if we were to try and rent. So, we chose to live in the area we wanted, and by house hacking, can afford to do so. And, once we move out of this current house hack, we will be another $1700 over our mortgage. (As a note: your mortgage isn't your only expense when owning a home, the numbers are more to paint a picture). Both of our house hacks we will be holding long term as part of a growing portfolio.

So, it's important to choose your strategy from the outset. Either way, it should drastically reduce your housing expense, regardless. The savings you get from house hacking is where the real monetary power is. If you can save $1000/month on your housing, you can use that to pay off debt, build/buy investments, save for the next house hack, travel, etc.

Hope that perspective helps!

Jon

@Andrew Freed would probably be able to help you out

Hi BP,

I just got a letter in the mail from my accountant of many years that she will be retiring. So, two questions...

1) Can anyone recommend a real estate/business focused CPA that does planning as well as tax prep.

2) She mentioned that she had no referral CPA or firm at this time. I think she is letting it die out. A la Codie Sanchez, could this be an opportunity? If any CPAs out there are looking to potentially acquire a book of business, DM me, and maybe we can figure something out?

Thank you for any suggestions! Btw, I am located in the North Shore in Massachusetts.

Jon

@Arian Mustafa

I grew up in Essex, and went to MERHS, so I am also familiar with that town as well. At a quick glance, on a per unit basis, that seems cheap! You could be walking into instant equity if you look at it that way. But, I don't know the unit mix, or condition. The break-up value could protect you easily if you needed to sell off property or wanted to raise cash for other opportunities.

I haven't done this, and maybe this won't work from a lender perspective, but do you have a lot of equity in your other properties? Could you find a lender who can do a blanket mortgage with your existing properties, and this new portfolio? Thought being, the equity from your existing properties is your down payment (or partial down payment), and then work with the seller to see if they will seller-finance the remainder. This is just a thought. Any commercial lenders seeing this, please chime in if this is a possibility or if this wouldn't work.

Like you said, these types of portfolios don't come around too often. It would probably take you a lot of time and more than $18m to replicate in today's market. Keep us posted, I would love to know how this turns out, Good luck!

Jon

Hey @Andrew Freed

No advice from me, just a huge congratulations!! Hope it all works out, you're crushing it!

Hi @Max Lichtenstein

That can be a good house hack! Look at what you are paying in rent now, and compare it to what you would be paying if you bought the 2 family building. If the house hack number is drastically lower (I know someone used that in a previous reply, haha) then, yes, it can be a good deal! The difference in savings is your "cashflow." If done correctly, you will increase your savings rate by doing a house hack. Example: your current rent expense is $1000, your out of pocket expense from the house hack is $200. You would be saving an extra $800 a month. I call that a huge win, and a successful house hack. That additional saved cash can be put towards paying down debts, investing in other properties, or using it on yourself. 

The house hack won't make you rich, but you should be able to definitely improve your financial position.

Hope that perspective helps!

Hi @Tammy Ginsburg

If this is going to be a long term buy and hold, it shouldn't matter if the market falls. You want to make sure your numbers work from day one. If the numbers work, then you should be fine in any market. This also assumes that you are using fixed rate debt if getting a mortgage.

Hope that helps!

Hi @Karen Frederic

I think by you saying that house hacking is what you easily understand is a probably a good launching point. It is a fairly easy way to start in the real estate world: low down payment, lowers or eliminates monthly housing expense, learn how to landlord with hands on experience, gain all the tax incentives that real estate offers, to name a few. 

I think if you started with house hacking (and eliminate your housing expense), then that can give you time to study other methods of real estate investing, as well as put yourself in a financial position to act on future opportunities. 

In the meantime, education is your best bet (unless you're ready to act). My personal choice is to house hack, and hop. Buy a house hack, and then hop to the next after 1) the owner occupant requirement has past, 2) I have the means to buy the next one. My mind set behind that is 2 fold. First, if done right, I eliminate my monthly housing expense or drastically reduce it, therefore being able to save a lot of my income. Second, this method allows me to build up my portfolio of rentals. I may pivot my strategy in the future to expand my rental portfolio, or even buy businesses not necessarily related to real estate. But, for now, I think this is the simplest way to further my investing.

Hope this perspective helps!

Jon