All Forum Posts by: Laura Shinkle

@Matt Powers that's awesome that you're thinking about househacking to start out. Moving and buying your first piece of real estate is a lot in the next year! Since you're relocating to a new market, the best advice (like someone mentioned) is to figure out where YOU will be happy. You can make house hacking work anywhere, really. I work, live and play in Charlotte, I'm from Asheville, and I've lived in NC for almost 30 years. IMO here's the differences between the areas you mentioned:

1. Asheville: Asheville is in the Blue Ridge Mountains, so it's a very outdoors focused community. Lots of breweries. Think hiking, mountain biking, white water rafting and a community overall focused on all natural things and sustainability. If this sounds like your perfect playground, go for it :) There are STR restrictions in these areas, so make sure you know what you're buying before you do.

2. Charlotte: This is the largest city in the state, so if you're looking for a small town city vibe (even though its a large city, it still feels small sometimes) this might be it for you. Our downtown isn't big, but each neighborhood has a different feel, and we have affordable suburbs if you want to be close but not IN the popular areas. We also have a decent amount of breweries, UNC Charlotte, two lakes and the Catawba river, the White Water Center, major league football, soccer and basketball teams and minor league hockey, baseball and women's soccer league so there's always something to do. 

3. Greensboro: More of a smaller town feel. More affordable, growing, but not that much going on (IMO). You're about 1.5 hrs from both Charlotte and Raleigh, so halfway could be a good compromise if you like more of a smaller feel but still near conveniences and shopping. 

4. Wilmington: smaller than Greensboro, but has more of a tourist base since it's on the coast. The obvious attraction is the beach. UNC Wilmington is also located there. 

So, overall, I think these four areas are very distinct in the style of life they offer. If you're not sure, do a road trip across the state, visit some of these areas and see what 'vibe' fits with you more. I think you can find affordable homes in any of these markets. If not in the exact spot you want to be, but at least the outskirts. Once you narrow it down, interview agents in the area and go from there!

Good luck!

@Tanner King it's a great question, and one that every investor asks right out of the gate. The tricky part, is everyone analyzes and values one metric over the others. What I mean is, some investors look strictly at cash on cash return, some look at cap rate, others just want to make sure their mortgage is covered. There's no wrong way, as long as it makes sense for YOU. And you actually pull the trigger on something ;)

This is what I would look at: 

1. Find out the inventory of duplexes in your market. Are there a decent amount coming on the market, or is there like 1 a month? If that's the case, maybe look at a different house hacking strategy that might work (like a SFR with an ADU or renting by the room, ie having roommates).

2. If there's enough duplexes that it's likely you find one you like in a reasonable amount of time (less than a year), then start looking at them in your preferred area. How long do they sit on the market, are you finding them in move-in-ready condition, or will they need work before you move in? 

3. Figure out what rent would be in the area. Compare other rentals with a similar size, location and bedroom count to get an estimate of what the rent would be while you're living there. If you're planning on only living there 1-2 years, rent may not change THAT much, so calculate what the rent would likely be right now for your side as well. 

4. Estimate utilities and figure out who pays them (separate meters, landlord paid, etc)

5. You can google or search on BP for definitions of cash on cash, cap rate, etc. Figure out which method makes the most sense for you and look at the numbers for at least 10 deals. Usually a pattern will emerge on a 'normal' deal in your area. Once you know that, you'll be able to spot one that might have a better return than 'normal'. Or maybe one that's move in ready, whereas most of the others need work. Whatever appeals to you more. 

Nobody said it would be easy. This requires doing math, patience and a learning curve. Once you feel like you've gotten the hang of the numbers, start putting offers in that make sense. Someone else mentioned work backwards, ie put an offer in for the price that makes sense. I'd add, talk with your Realtor about what numbers it needs to be at to make sense. If you intend on putting in 50 low ball offers a month, make sure your Realtor knows and is ok with that amount of legwork (because it's a lot). It'll also get grueling for you as well, rejection isn't fun. So talking with your Realtor on scenarios that truly are likely may help you speed up your search and offer process, and help you find a great spot. (that is, assuming you've hired an agent with experience, market knowledge, and the wisdom to be able to guide you to what you're looking for). 

Good luck, hope this helps!

Not every area has multifamily properties everywhere. They're prolific up north, yes, but here in the south, there just aren't that many. And the ones that were originally built have been renovated to become a SFH. So while it's not as ideal as a multifamily property, it does present a solution for those that are in the personal situation where they can.

I househacked my first property before the word 'househacking' was coined. You know what it is? Roommates. It's just having roommates. I feel like by coining the word 'househacking' we've made it into this new, shiny, crazy thing and it's not. People have roommates growing up (their family), and in college most likely. So if I'm in my early twenties, want to get started, why not do that? 

It can always go wrong, just like your college roommate might not have been the best. But what's the upside here? It allowed you to get into the property, start building appreciation, lower your monthly expenses, and learn more about buying property. There are always trade offs with real estate investing. The convenience and luxury of living alone is worth it to some for the benefits. Just go into it armed with solutions, being up front with people and setting yourself up for success. It'll work out. :) 

Hi @Aaron Dyson congrats on the new contract. I love new construction for that very reason. At the end of quarters, months and years, they usually have some killer deals. Having to use their lender is annoying, but for someone who has done it before or at least knows it can be a frustrating process, it's worth it for the deal they give you. 

Keep in mind comps can change in the 1-2 years you plan on living there. If you can tolerate it, go for the extra roommate. The biggest hurdle I have with convincing ppl to househack is they feel like they 'deserve' to live alone, they've put in the time with roommates in college, etc and they wanna feel 'grown-up'. But that extra $7200/year will go a long way in paying down your loan faster, build up another downpayment fund, pay off other debt, etc. 

For new builds, get a third party inspection. The inspector should be thorough and telling you any issues. Since it's new construction, I hand the construction manager the full report and make sure they fix EVERY issue. It's a new home, so it should be as close to perfect when you buy it as possible. When you do the New Home Orientation, take your time and be thorough. Turn on faucets, showers, look at how the toilets are installed, are they wobbly, EVERYTHING. This is your one chance to change things. Take it. And make sure your Realtor is there with you as well, as they've likely done this dozens of times and know what to look out for. 

For the LLC, talk to an attorney and your tax person. I've never been given a solid enough reason to put my properties in my LLC. So I'm guessing it might depend on your state laws and personal situation. and make sure you know of any sticky items that would eliminate the protection you get from the LLC. Lastly, know that any conventional loan likely has a 'due on sale' clause, where if you change the title of the property, they can call your note due. Some ppl find that's worth the risk, some ppl don't.

For managing properties, I have two options: 

1. Hire a PM for the townhouse if you're doing a LTR and not a by the room situation. You already have a job, there's no need to give yourself another one. Delegating up front will help you open up brain space to expand and think about how to add to your portfolio, rather than running your portfolio.

2. If you feel passionate about managing them yourself, I'd recommend getting as much done and communicated up front. Make sure you have a solid lease, your tenant knows your expectations, how are you going to screen them, etc. Have a plan in place up front rather than trying to figure things out on the fly as much as possible. Especially for the roommate situation. Make sure everyone knows a cleaning schedule, expectation for common areas, how are you splitting utilities, guest policy, etc. 

Hope this helps, and good luck on your journey!

 That's awesome that you have that flexibility! If that's the case, check out some of the economic data about what cities have strong job and population growth. Since you have flexibility with locations, you have your pick of cities that are growing, but also affordable. I've also had clients look into different Facebook groups that they can find about moving to a certain area and learn that way. 

I second and third all the comments above. Househacking is different from regular REI because you will need to live in the home. Living somewhere that you hate will make for a miserable real estate journey and you'll not want to continue. So...where do you want to live?

I'm also assuming (which I may be assuming incorrectly) that your job is in Tampa and you don't work remotely. That means that if you move to another area, your income could potentially change (up or down, who knows). That'll affect your pre approval and ability to buy. 

I'm sure there are areas around Tampa and maybe suburbs that are more affordable than others. Check those out first. If you find that there's nothing that you like or would be willing to live in with your budget and location, AND you had the flexibility of being able to move and keep your job or you're willing to job hunt in different states, THEN explore different areas. But as I've said, focus on your happiness in living in that location first, then look at the real estate market and make sure it works for you. Good luck!

Hey Vince, sounds like your portfolio is pretty great! Congrats on building that :) 

As far as the ability to purchase it as a primary with 5% down, yes you definitely can. Doing this is how I've build my portfolio from 1 to 4 homes in the last few years. That said, there are some things to consider....

The reason the other people on this thread were talking about a lease is because of your debt to income ratio. The lender will need to be able to prove on paper that you can afford all those mortgages with your job income and the rental income that you have. So you may not NEED a lease signed for your primary residence already, especially since that's a lot of stress to find a new tenant and have a lease in place while you're under contract on another home. However, if your income can't support the debt of the mortgages plus whatever else you may have (car loan, student loans, etc) then you may NEED that lease signed in order to offset some of the debt. Hope that makes sense and explains the why behind it. I find it helpful to know the 'why' to help understand and move forward.

I would 100% recommend you talk to a lender and get preapproved before moving forward on the triplex. A good one will be able to take a look at all your finances and let you know whether you need a lease or not on your primary residence before you qualify for the loan. 

The lease would need to be a year long lease, most likely, if you need to go that route. STR and MTR income can't be used unless you've had it consistently for I believe 2 years. Its variable, so they need to see the trend over two years to be able to average out what a monthly average income is for a property.

And your last question...if you tell the lender that you intend to live in the property and then don't move in and rent it out instead, that is 100% considered mortgage fraud and is a big deal. The only exception to this is if life circumstances happen and you CAN'T. Primary residence mortgages require you sign documents stating it will be your primary residence and you'll live there at least a year. After that you'd be free to move back into your single family home property if you so choose. 

Hope this helps, and good luck.

@Mike Sfera some property managers might do this and maybe give you general guidelines on what to expect for Class A, B and C areas, etc. However, this type of work I would say falls more into the Realtor's area of expertise. While you're interviewing PMs, I'd also be interviewing Realtors to help you with this, focusing on ones that have relationships with PM in the area, have helped investors before, etc. If you find a PM that you like, ask if they have any Realtors they could refer you to that work closely with them. For example, I work closely with a PM down here in Charlotte so I know what they're going to be recommending for updates/work to be done prior to getting a tenant in place. That kind of relationship will help things go smoothly, both in the planning phase and the handoff from when you buy to when your PM takes over. Hope this helps, and good luck with your first property!

Hi Kathy!

I'm familiar with the Charlotte market (that's my work playground!). Sounds like this is maybe in the Wilmore area if it's in a historic district near South End. I do like the Wilmore/Southend area. Parking will likely be your biggest hurdle. That said, there's quite a few homes in that area that have that challenge (no driveway/street parking). When you're looking at rental comps, I'd look for homes that also don't have a driveway to get an idea of how long it took to find a tenant and if you notice a big difference with the comps. 

In my experience, something like that might cause the home to sit on the rental market longer to find a tenant that is ok with overlooking that deficit. 

For the historic district, I would just make sure that you fully understand what requires approval and what that process looks like. Some districts are more strict than others. 

For the alley, I'm not sure I'm familiar with that set up, so I don't know that I can really comment on that. Did you mean the alley is 8 ft wide, not inches? 

I think if you're ok with the numbers, go for it. That area is appreciating and is a great spot for those that want the convenience of Southend and walkability. Good luck!

@Eli Gosnell love the strategy, it's the best (IMO) when you're young and flexible with living situations. Some thoughts for you:

1. When looking at homes, being flexible will help (ie multifamily vs large single family). I have many potential clients that just never pulled the trigger (and have lost out on so much wealth building) because they were hung up on it needing to be a multifamily property, which isn't very common in my market. So look at what the market has, what areas are good, and figure out how to make it work from there. All the househackers I've helped purchased single family homes, so the rest of the tips are for that situaiton.

2. Size of the rooms...would an adult be able to make the room work comfortably? 

3. Primary suite and rooms with private bathrooms rent for more. 

4. The more different living spaces you have, the better. For example, a living room and a den. Open floorplans are great for families, couples, etc, but more rooms are better for roommates!

5. Always have your tenants sign a lease and be specific on what they're responsible for as far as the main living spaces. Are you furnishing the living room or can they bring furniture? What are expectations for cleaning? Being clear up front can prevent frustration down the road.

6. What's your exit strategy? Would you be able to cash flow or at least break even with a long term, unfurnished lease? would you want to try mid-term or short term rentals to get a higher cash flow (which might be necessary if you put minimal amount down to cash flow). Would you continue the room rent? 

7. Find rental rates (for either rooms or duplex, etc) from Zillow, Roomster, FB Marketplace, etc. Keep in mind things like private bathrooms, private entrances, etc will make a difference for what someone is willing to pay. 

8. For utilities, you have two choices. Either do an estimate up front and roll it in with you rent, or charge separately for utilities. If you do an estimate and include it with the rent, it's easier but you also might run the risk of under charging if you don't know what to expect or if the tenant abuses that. But the trade off is it's easier. If you charge every month for utilities, then it's more time consuming but ensures you're getting your fair share for the utility cost. 

I think that's all I have for now. Good luck!