All Forum Posts by: Liam Marshall

It's hard to accurately estimate rents. In the end, it's just whatever a tenant is willing to pay. You can either pay money to have someone give you their assessment or you can do it yourself. The DIY method is simply acting like a prospective tenant. They go around to multiple websites looking for 2 bed 1 bath units. Look at the locations you would want to rent in and ignore the rest. Use a spreadsheet of comparable properties to get the price per square foot number. Make sure you only apply that number to similar properties. Don't worry so much about the layout. Worry more about price, location, and amenities. That should get you pretty close on the estimation. 

Hey Liam, 

A cash-out refinance is when you take out a new, larger mortgage that pays off your existing mortgage and gives you extra cash. Typically most lender label it a "Cash out" when you walk away with more than $5,000 dollars. 

Typically lenders will provide you 75% of the total value of the home in a loan. 

For sake of example lets pretend closing costs are not included. 

Home value: $200,000
Remaining loan amount: $20,000
Refinance loan amount: $150,000 (75% of $200,000) 
Cash-Out: $130,000 ($150,000 - $20,000) 

Feel free to send me a DM with any questions or if you would like to chat on the phone. 

@Liam Marshall

Congrats!! It's the best way to start (in my opinion). I've done it twice and it's already changed my life. 

Top 5 things to consider BEFORE house hacking:

1. Are you willing to live next to your tenants?

2. How comfortable are you being a landlord and interacting with tenants daily/weekly?

3. Would you want to live there for at least a year?

4. How much do rents cover your expenses?

5. How does that compare to your current living cost?

What I've Learned:

This may seem obvious, but: You must factor in that you're living there.

Analyzing a house hack like a traditional rental is not comparing apples to apples.

Expecting a high CoC, cash flow, or even breaking even with today's interest rates will likely leave you on the sidelines.

And unfortunately, I wouldn't be shocked when rates come down that prices will likely be quite a bit higher.

The quote "Be greedy when others are fearful, and fearful when others are greedy", very much comes into play in these times.

Right now people are fearful.

We're seeing some of the best small multifamily deals here in Reno, NV that we've seen in quite a few years (of course RE is area specific and varies).

If you have the cash to go on the offense, it's a great time to do it IMO.

If you're able to buy now, and over 4 years you improve each unit you live in by living in one for one year and moving into the next, you'll have a fully renovated 4-plex while covering your living expenses, paying down principal, and forcing appreciation through increased rents.

If that's all you ever did and waited another 26 years and had it paid off, depending on the market you could probably live off of that income.

You certainly could here.

This is ALL assuming that you can afford to make the payment. Things will NOT go perfectly (at least in my experience).

That being said, I remind myself that you don't need a massive portfolio to be financially free, and typically people that do flex that number instead of flexing the real value of real estate investing IMO:

Freedom of time.

Hope this helps and good luck!!

@Liam Marshall love house hacking.  It's how I got started and certainly wouldn't have as many properties today if I didn't start out house hacking.  Here's some basic suggestions I would recommend:

1. Get prequalified before you go shopping - make sure you know what price point to hit before you start looking for a home.  Getting prequalified is free and it might even answer some other questions about the process when you do it.  Do this first.

2. Choose based on YOUR needs first - this will be your home.  You will live in it.  You will need to commute from it.  You will need to feel safe living there.  Etc, etc, etc.  Chose for you and everything else will work itself out.

3. Cashflow - you wont' cashflow.  You just won't.  You will occupy part of the property.  And you are borrowing WAY more than we do when we execute on a true rental property.  Having no cashflow is OK.  House hacking REDUCES your costs of homeownership.  That's the whole point of it.  I know, I know...I saw those same videos too.  You won't cashflow - and that's ok.  

4. Occupancy - you only commit to living in the property for 12 months.  There are tax advantages with certain strategies if you occupy for 24 months.  The point here is don't look for the "perfect" property.  Just execute on one that you feel comfortable with for 12-24 months.  You're going to own LOTS and LOTS of houses...it's ok if the paint doesn't exactly match your sofa.  You can get picky later in life if you want to.  Keep it simple here.

Hope all of that makes sense.  Thanks!

Nope. Don't worry about step 10 if you're at step 1. If you focus too much on your future problems, you'll be too scared and overwhelmed to start.