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All Forum Posts by: Kristofer Marsh

Kristofer Marsh has started 5 posts and replied 13 times.

Post: Is anyone house hacking in Reno, NV?

Kristofer MarshPosted
  • New to Real Estate
  • Reno, NV
  • Posts 13
  • Votes 10
Quote from @Wesley Pittman:

@Kristofer Marsh

Hi Kirstofer!

Yep, lots of people househack here in Reno. With the current rate environment, expect the rents of your other unit to help reduce your monthly expense not eliminate it! Because we are a more appreciation driven environment and our cap rates tends to be pretty low (sub 6 for the past 10 years for most small inventory), it pretty much always seems that when you buy the property, the rental unit just covers some of the costs, but give the calendar some time to do its magic and they end up performing pretty well in the long run. Here's an article I wrote on my first deal which was house hack near UNR.

https://www.biggerpockets.com/member-blogs/15282/101055-and-...

 Thanks @Wesley Pittman, this is encouraging information. I do consider "Successful" in Reno meaning house hacking at all. With the restrictions to ADUs it seems like most house hacks are either in a duplex/MFH situation or a "granny unit"/unfinished basement setup.

Post: What is working for you right now?

Kristofer MarshPosted
  • New to Real Estate
  • Reno, NV
  • Posts 13
  • Votes 10

What strategies are working for you in this market? Flip, BRRR, Subto, syndication, LTR/MTR/STR - there's opportunities out there and I'm curious where you're seeing them in your world.

Post: Is anyone house hacking in Reno, NV?

Kristofer MarshPosted
  • New to Real Estate
  • Reno, NV
  • Posts 13
  • Votes 10

Thanks @Andrew Postell. By successful, I mean simply that it's working well for you. Could be L/M/STR, something creative like storage, etc.

Thank you for the tip on going local. I'm in a few meetups in the area, but thought I'd cast the wider net anyway. 

Post: Is anyone house hacking in Reno, NV?

Kristofer MarshPosted
  • New to Real Estate
  • Reno, NV
  • Posts 13
  • Votes 10

Duplexes/MFH in Reno are rare, and with the ADU restrictions I'm wondering if and how people are successfully house hacking here. I've seen a few basement units with separate entrances, what is your situation and how did you find it?

Quote from @Jim K.:
Quote from @Kristofer Marsh:

My father will be retiring in the next 2 years. He lives in a suburb of Baltimore, MD, and is about to close on a house in The Villages, FL, which he and his partner plan to rent out for a couple years until they are ready to move.

My dad has agreed to work with me to explore options for using his current home as a springboard to help our family begin the path to generational wealth. No one in my family has ever seriously invested in real estate before.

Initially, we thought one idea would be to do a cash out refi on his curent home, which would net him around $100k to add to his retirement coffers, and then rent out the home, the idea being to let it appreciate and cash flow. I would help him manage it from a distance and we would split the cash flow. The house would eventually be sold or left to me and my other two siblings.

I see issues with this but overall think it could work. Issues being: if he doesn’t sell within three years he’ll be hit with higher taxes, also the fact that a refi would mean higher interest rates and less cash flow, and of course the potential pitfalls of hiring a PM.

Another thought would be for him to sell the house and go in with me as a private lender where we split cash flow and equity on a BRRR or a MF unit. The idea being to create the "infinite money loop" using the same cash to invest and build a portfolio. This option does not involve my siblings, at least I'm not sure how it could (they probably would not be able to assist in deals/management etc.).

Are there better options to build generational wealth with this scenario?

Who would I even talk to about this? I assume a CFP who understands REI, but I'm not sure the best way to find those people.



This is going to be a long one, so brace yourself.

You look pretty young. Young enough so that you don't really need your father or your siblings in this -- that idea is only to get you into the process of building generational wealth a bit faster. But what is probably not fully clear is that a lot of ducks need to get into order before you're really ready to move on pretty much anything in REI. Sometimes trying to move with speed invites ruin on your head. Sometimes achieving early success will, too, but that's another matter.

So, is your spouse completely on board here? Have you accepted the fact that there are going to be plenty of lean years where you artificially constrain your spending to pump more money into your business? What kind of reserves do you have? What kind of constrained budgeting do you do with your family? Are you at zero debt? Or do you fantasies of quitting your job and running to full-time REI as an employment alternative in three years or less? Many have these fantasies. Most people who actually get somewhere in REI still have jobs well past their fifth or tenth rental unit.

Now that that's said, let's move on to your ideas.

1. Cash out refi: Pull $100K out of the home, rent it out. Here's the key problem: "I would help him manage it from a distance." So he's going to be in Florida, and...where are you? Oh, we don't know. Are you local to the home? Can you drive there in 20 minutes or less from your house? Or are you going to try remote-managing this place from somewhere more than an hour away? This will be your first time doing this, it seems. There is a good chance of failure here. If you're local, on the other hand, it's a much more workable plan, and the chances of really stepping on your crank are not as great. You should pay close attention to what @Jack Seiden has pointed out, however. Do you really need to do this to your father at this stage? Because there are plenty of mortgage deals out there with a similar kind of upside if you just buckle down with your family, pay off all your personal debt, and learn how to get $25K or so in reserves together out of your income(s).

Personally, I feel there's no chance that interest rates will go up in any refinancing scenario for the next 10-15 years. The downside of that is too obvious for our beloved politicians of either party. They would rather risk ruining the country over the long term than let that happen, and so they will work to artificially manipulate interest rates down in the short term, no matter what the consequences.

If you hire a PM and don't handle managing the property yourself there is a high degree of probability that you will get screwed one way or another. This is a portfolio of one. You're basically just there to be manipulated to the average third-party property management outfit.

2. BRRRR Don't do it with your dad as your money guy. You're probably going to end up in the hole in your first BRRRR. Everyone does -- the gurus rarely talk about, but extensive renovations are not for the newbie, unless the newbie has a construction background, and even then, they are damned hard things to pull off with zero experience. Even if you hire a GC to do most of the work for you. Way too much risk for my blood. And your father will pay the penalty for your inexperience and overconfidence.

The "infinite money loop" is pretty much a guru's cheap fantasy. Here's the reality -- you get screwed on ONE appraisal, ONE renovation, ONE subcontractor, your infinite money loop ends. Appraisals are getting screwier, it's harder and harder to pull off renovations (even with experience), and you don't have the long-term contacts to have access to the kind of subs you would need. Nobody really keeps the money loop going for long as a newbie, taking out as much as you put in, running a string of successful BRRRRs on just one initial investment. There was a time when this was significantly easier. That time is over in almost all of America today.

3. Taking your father's money and investing in (what I assume is a small) multifamily: IF you can live in one of the units of a triplex or quadplex your family, IF you can find something that doesn't need a lot of work, IF you're willing to get your hands dirty in the beginning as you try to build a team of trusted subs, this may be your best option. But if you're thinking about something bigger than four units, you're talking about getting a commercial loan. You're probably not going to get one, especially with zero experience in this.

But the trouble with this strategy is that everyone in real estate knows that viable quadplexes are gold to a real estate investor, and triplexes aren't far behind. While you could do this with a duplex, it's probably way too slow for your blood. It took three years of losses before my first duplex started turning a profit, but I bought a total crapshack for $45K cash and getting one unit to barely livable condition and the other to rentable condition took me three years of my spare time. That the neighborhood rapidly gentrified to the point that SFRs, some seven years later, now go for $170K in turnkey condition, well, I just got lucky with that.

 @Jim K. WOW. Thank you for your thoughtful response. There's a lot to digest here. 

I certainly do agree with you and @Jack Seiden regarding my dad's retirement/twilight years. The last thing I want to do is burden him. He expressed interest in keeping his current SFH in the family as an investment property after he moves to Florida, citing appreciation and eventually leaving it to me and my brother and sister.

I had similar concerns about hiring a PM for one property. Thought I'm from the area, I do not live there any more. My sister still lives in the area, and I suspect would be open to managing it. 

I am not considering a get rich quick scheme here. Genuinely interested in seeing if my father's situation could offer my family an entry to building generational wealth. We are from a middle-lower class neighborhood. I have a great paying job right now and am saving for a house of my own soon. My father is interested in options that will set his children up for the future, as well as net him some hard-earned cash from equity now, which is where the long-distance assistance in managing the property comes in.

From the responses I've received it seems like this is not the best way to go. I may consider seeing if he'd be interested in becoming a private lender with me to tackle a deal where I currently live, or someone in Baltimore, MD or Columbus, OH. He could become a private lender and make a little profit through a combination in interest in equity. I understand the potential perils of borrowing money from a close family member, and that there is always risk associated with REI.

Thanks again for your honest thoughts!

Quote from @Jack Seiden:
Quote from @Kristofer Marsh:

My father will be retiring in the next 2 years. He lives in a suburb of Baltimore, MD, and is about to close on a house in The Villages, FL, which he and his partner plan to rent out for a couple years until they are ready to move.

My dad has agreed to work with me to explore options for using his current home as a springboard to help our family begin the path to generational wealth. No one in my family has ever seriously invested in real estate before.

Initially, we thought one idea would be to do a cash out refi on his curent home, which would net him around $100k to add to his retirement coffers, and then rent out the home, the idea being to let it appreciate and cash flow. I would help him manage it from a distance and we would split the cash flow. The house would eventually be sold or left to me and my other two siblings.

I see issues with this but overall think it could work. Issues being: if he doesn’t sell within three years he’ll be hit with higher taxes, also the fact that a refi would mean higher interest rates and less cash flow, and of course the potential pitfalls of hiring a PM.

Another thought would be for him to sell the house and go in with me as a private lender where we split cash flow and equity on a BRRR or a MF unit. The idea being to create the "infinite money loop" using the same cash to invest and build a portfolio. This option does not involve my siblings, at least I'm not sure how it could (they probably would not be able to assist in deals/management etc.).

Are there better options to build generational wealth with this scenario?

Who would I even talk to about this? I assume a CFP who understands REI, but I'm not sure the best way to find those people.



I’m gonna be honest this sounds extremely risky, your dad is in the twilight of his life I wouldn’t burden him with additional debt on his paid off house (especially at 7+%) I’d either do nothing or if he’s in a position where he really doesn’t need the house he should give it to you and you can take this risk and he would have no expectation of any return, anything else is extremely risky/messy.
Thanks Jack, I appreciate your honesty. I’m considering talking with him about selling the house and then using some of his take home cash to fund some deals with me as a private investor instead for the reasons you stated.
Quote from @Raj A.:

Depending on what type of strategy you want to pursue (STR, LTR, etc.) I've found tools like AirDNA, awning.com, and even Redfin's analysis pages (https://www.redfin.com/city/1073/MD/Baltimore/housing-market, though they are fairly generalized and things can change neighborhood to neighborhood in an area like Baltimore, so your mileage may vary) to be useful in helping to establish some general comps. BP's pro tools are also great in terms of establishing potential rental value comps as well (though it looks like you're not a pro user). Talking to CPA is a great next step (and if you do talk to a CFP, make sure they are fee-based).

Where is the home located if you don't mind me asking?

Thanks for your advice! The home is in Pasadena, MD. 


My father will be retiring in the next 2 years. He lives in a suburb of Baltimore, MD, and is about to close on a house in The Villages, FL, which he and his partner plan to rent out for a couple years until they are ready to move.

My dad has agreed to work with me to explore options for using his current home as a springboard to help our family begin the path to generational wealth. No one in my family has ever seriously invested in real estate before.

Initially, we thought one idea would be to do a cash out refi on his curent home, which would net him around $100k to add to his retirement coffers, and then rent out the home, the idea being to let it appreciate and cash flow. I would help him manage it from a distance and we would split the cash flow. The house would eventually be sold or left to me and my other two siblings.

I see issues with this but overall think it could work. Issues being: if he doesn’t sell within three years he’ll be hit with higher taxes, also the fact that a refi would mean higher interest rates and less cash flow, and of course the potential pitfalls of hiring a PM.

Another thought would be for him to sell the house and go in with me as a private lender where we split cash flow and equity on a BRRR or a MF unit. The idea being to create the "infinite money loop" using the same cash to invest and build a portfolio. This option does not involve my siblings, at least I'm not sure how it could (they probably would not be able to assist in deals/management etc.).

Are there better options to build generational wealth with this scenario?

Who would I even talk to about this? I assume a CFP who understands REI, but I'm not sure the best way to find those people.



Quote from @Ozzy Sirimsi:

@Kristofer Marsh

Cause I rather not to have mortgage but have HELOC on a house so I can have access to capital by just writing a check if nothing comes up collect 20k a year.

But again that's my preference based on where I am in life :)

Ah, I see! So you essentially use the property as a bank to fund deals. Seeing as we are new to REI, would a HELOC still be possible if not owner occupied? I'm assuming yes but possibly with higher fees/more paperwork until we build trust/credit with the lender.

@Joe Norman thank you for you honest suggestion. By no means do we think this will be passive, although we were planning to hire a property manager. This property is not in Baltimore but a popular suburb. Would $400 dollars make a difference? Some, but the way I’m seeing it he could cash out $100k and keep the house as an asset for his children to inherit while still taking in some cash flow every month. He can cover months where it’s vacant but this is in a family friendly neighborhood near good schools and not far from the water, I think renting will be easy. 

Also, I plan on helping him with this. He doesn't want to worry about it and I want to learn about REI, so I would manager the property manager and essentially have POA to make decisions.

@Steve Vaughan thanks for your reply! What do you mean if he doesn’t sell within three years the gain won’t be tax free?

@Ozzy Sirimsi this is an interesting option we didn't think about yet. The current house in an attractive neighborhood with good schools in a Baltimore suburb. Why lock up the $200k capital in a single home like that? I'd almost prefer to rent the place out now with the current mortgage which would be paid off by someone else in about 10 years. Another option would be to sell and use some of the profit to put a down payment on another rental property. Or, partner with his son (me) to private finance a BRRR type deal over and over for the coveted "infinite return".

A better way to frame what I need help with is given his situation, knowing that he wants to both make some cash now and also set his children up to help get the generation wealth train moving, what would be the best way to do this? He’s thinking if he keep the house in the family but takes out equity now that both gives him some immediate cash and also leaves an asset to continue to appreciate. What would you do?