All Forum Posts by: Laura Hines

@Robert Hooks Lots of good information- thank you! I started looking into CPA already because I figured it wouldn't be worth my time (and stress). Especially with a house hack it seems more complicated. 

So do you have one bank account for all four properties (or is it combined with your personal funds)? I also just thought it may be easier for me to keep track of them with separate bank accounts. 

When using hours to qualify for a real estate professional would hours renovating our side of the duplex? I would assume that they wouldn't. Same question with 1099s, we are hoping to do most of it ourselves for now, but if we do exceed the $600 limit, would that only apply to the tenant side? 

I would recommend searching for a broker to create a relationship with. We have an insurance broker that does all our insurance and I love using him because he works with other real estate investors and I just call him and he runs our numbers for many insurance companies to get us the best rates.  You can also ask questions to a broker about types of coverage. You can get discounts for bundling multiple properties or combining it with your car insurance, etc. If you have a broker they will have a profile on all your current insurance so they run these numbers automatically for you. 

@Robert T. If you read the link I posted above, there is more information on what banks actually look at for owner occupancy. Lots of other people have the same question as you. 

You generally can't buy a property as a primary residence and then immediately switch it to investor financing (you likely wouldn't have the equity to switch it over) and if you refinanced it immediately it could red flag your loan for inspection. The benefit to owner occupied loans is that when you move out the only switch that occurs is that you tell your lender you're moving and you keep the same terms. You can only hold one owner occupancy loan at a time.  

As far as the LLC you should really consult an attorney and probably a CPA for those questions. It completely depends on the regulations in your state. Then there is the age old question is an LLC really better than having good insurance. You can read for days on BP people on both sides of this argument. The real answer is to consult a professional. I think the real question you need to ask yourself is why do you want to put it into the LLC. Typically people will tell you not to put your primary residence in an LLC because it makes it complicated and you lose out some of the tax benefits of having a primary residence (hence the need to consult a CPA).

@Robert T. we just closed on our first duplex a few weeks ago and a few things to note. #1 find a good lender that you can build a relationship with and ask them questions. If you do want to invest and keep buying properties having a lender that will field your questions and be honest with you is important. #2 If you are buying a property as owner occupancy financing it has to be your primary residence. You also have to move in within 60 days or it is loan fraud. If you just say it is your primary residence but don't live there it is also loan fraud. I am sure that there are people out there who have done this, but just be mindful. Also some lenders have a seasoning period (like you have to have it has your primary residence for 6 months, or a year) before you can have somewhere else as your primary residence. We just bought our first house hack and personally do not have a seasoning period so if we wanted to buy another right away as owner occupied we could. Technically you and your fiance could have different primary residences, but make sure you look into that. As far as your DTI, some lenders are different than others. I again would build a relationship with a lender and just ask them up front what is the highest DTI the would allow. Good luck!

Here's some more info about owner occupancy: https://www.biggerpockets.com/forums/49/topics/213...

@Andrew Wright You just have them sign a year lease. Even if they are your friends, this is so standard that any place they live otherwise would require it. Make sure that you have a contract, even if they are friends and they understand what is expected of them. We live in a college town and for students who leave in the summer they either try to find a sublet (which is difficult) or just stomach the two months that they aren't living there.  

We just closed on our first house hack two weeks ago and are doing renovations on our side currently. If you have done a house hack before, how did you keep track of expenses? Any tips specific to the financials for house hacks? I opened a separate bank account for our rent checks and applied for a different credit card that we will only use for purchases that are going toward the tenant side and pay with the new bank account. Do you pay yourself a certain amount every month from that bank account? I know that there are lots of ways to do it so just wanted to know things that have or have not worked for you. 

In terms of taxes, has anyone tried to do their own taxes while owning a house hack? Any tips on this? I am thinking next year it seems worth it to hire a cpa. 

@Jason Gamio I work close to there. My husband grew up in Topeka and we've thought about investing there before. On our first house hack where we live in Lawrence. His standard is its better to stay west of Washburn ave. that's where you can see the prices go up. However, that is just one opinion. I am sure if you get a good agent and start talking to a property management company they can point you in the right direction! Good luck. Feel free to reach out if you have any questions. 

@Jason Gamio I live in Lawrence, KS but work in Topeka, KS. There is money to be made in Topeka rentals. The area is being revitalized and I am expectant that it will continue to grow. However there are some areas you need to be careful of, my guess is the 20k property isn't a great area which won't attract great tenants or pull in great rent. I would try to look close to Washburn University, but I would get a lot of information from locals about the area you are buying in. 

@Chris Coleman That is helpful! I was planning on setting up a separate bank account and using money from that to pay for the all investment expenses but your tip on using a spreadsheet to mirror schedule E will be really useful. Thanks!

@Mark Hove We're in a similar situation however our loan is conventional and in my name only (so we can purchase more properties than if it was in both of our names). I figured there was also no point in creating an LLC now because we have very little assets to protect and we can still get the same tax deductions that an LLC would offer. I am talking more separate bank accounts for tax purposes. I was thinking of creating a separate checking (and potentially a credit card) that we would deposit rent checks in and then pay contractors or pay for repairs in the side that is being rented. It would technically be a personal account but we would only use it for conducting operations on the rented side. We would still use personal funds for our side.