All Forum Posts by: Matt Burgess

At the end of July, my girlfriend and I successfully purchased our first house hack! I am now looking for advice on how to structure my bank accounts to properly separate my personal expenses from any expenses surrounding my house hack. After reading through old forums, I believe this is my best option....

I am planning on opening another personal checking account, and getting a personal credit card. I am going to have my tenant pay rent online directly into my new checking account. I will pay for all of my expenses with the credit card and then pay off the card at the end of the month with the checking account. I will also pay my mortgage with the new checking account. However, unfortunately rental income does not cover all of the mortgage on this property, so I will also have to transfer money in from my personal account to the new checking account.

I hope that explanation made enough sense to follow. If you see something wrong with this system please let me know. If you have any tips on how to make it better, please include those as well.

All feedback is greatly appreciated!

2 Votes

@Brad Hammond @Matthew Brill Thank you both! I really appreciate the advice. Seems like it shouldn't be much of an issue.

0 Votes

Hello everyone! I recently graduated from college and started my first job. I am saving money and I am planning on buying a house hack once I have saved up some money for a down payment (hopefully 2-3 months).

Overall, I think I have a solid grasp on the house hacking process and why it is so beneficial. One question that I do have however, is what do you do if you buy a multifamily and all units are occupied. The idea of forcing someone out of their home, especially if they are long time tenants, is troublesome to me. Has anyone ever ran into this situation and what did you do? I am assuming cash for keys is one option, but I am curious if anyone has any other solutions or has ran into any problems due to this situation.

Any and all feedback is appreciated.

1 Vote

@Whitney Hutten I did just finish the BRRRR book, but I think I'm going to read it again because there is so much information! That book is what got me thinking about delegating the process. I will definitely look at the guide on your site, thank you!

0 Votes

Hi everyone, I am looking for advice for rehabs. I am interested in the BRRRR strategy, so this is something I need to either learn, or find someone to help me with. I don't have the skill to look at a property and know what changes need to be made to make it look/ function better. I don't have a great idea of what projects should cost. I don't have a great idea of how long projects should take.

I have watched videos, listened to podcasts, and read books and definitely gained some good general knowledge. However, I still don't feel completely confident with managing rehabs on my own.

Does anyone have any recommendations for resources that will help me improve my rehab skills/ knowledge?

Or better yet, does anyone have recommendations for how to completely delegate the rehab process through a project manager or some other method?

I appreciate all feedback!

1 Vote

Congratulations on your first flip! The house looks great and that is a great location (I live 5 or so minutes away). Did you run into many issues during the rehab due to the age of the property? I have heard some of the houses in the older part of Saint Charles can be difficult to work on.

0 Votes

Originally posted by @Javier A. Batlle:

@Matt Burgess:

If you are a long term buy&hold investor, you should definitely look into income statistics in the area/zip code, and compare those to rents (Rent-to-income ratio). This is, for me, a crucial thing to know as it basically determines whether rents can go up in the future. Usually you are looking for a RTI ratio lower than 30%, ideally around about 20%, which means that the average renter's budget has enough room to keep paying rent even if it goes up with time.

Job creation is another one to look out for. You can usually find these data in sites like the US census beaureau and other gov sites.

These are exactly the kind of numbers I was looking for, thank you!

0 Votes

Originally posted by @Mark Franklin:

I'm a new investor with only 1 property, but one thing I've been studying in my area (Baltimore) are the City Master Plans. They can usually be found on the city governments websites and are pretty detailed. The plans can tell you where the city plans on investing and improving in schools, where they plan to invest in local business, where they will provide incentives for real estate development, and even things like creating farmers markets. While this doesn't really help you get to know the market NOW, it does give you a glimpse into the potential future market.

Check out this Saint Charles County 2025 Master Plan Appendix A on Housing

I've only looked at this for about 10 minutes and I can already tell how valuable it can be! I am surprised I haven't heard of this before, but I will definitely be using it in the future. Thank you!

1 Vote

Just from listening to the BiggerPockets podcast, it is clear that getting to know your market is both extremely important and something you can/ should do while preparing to purchase that first property. I have been on Zillow daily checking both properties that are currently for sale and that have sold recently. I also check what current rent prices are like. Does anyone have any other tips/ tricks to getting to know your market? I am looking to take a deeper dive to reach a more thorough understanding. Also, outside of just simply getting a grasp on what prices are looking like, what else do you look for in a market? (Any key statistics, trends, etc.) Any advice is greatly appreciated!

0 Votes

Originally posted by @Randall Alan:

So let’s dispel a few myths... if you are deep into real estate it really isn’t as passive as most make it sound... the main reason being that to maximize cash flow you will do as much yourself (ie. Manage your properties) to keep as much of the profits as you can.

Once you get past that mental hurdle I would suggest there are several avenues to achieve $50k/year... but I would second the poster that said that you can do it for well under 1.5-1.7m dollars. I'm generating over 200k free cash flow /year on 40 doors... 19 properties... that's just rentals. 75% financed, 25% free and clear. Average net after PITI and reserve: $527/door/month. Approach: buy for under $75k / door, rent for $1,000 plus per month. Best deal so far: bought for $50k, renting for $1,400/month. I'm 3 years into real estate, generating 4x your 50k target, so I would say you could get to $50k with probably $300-400k investment if optimized for maximum profit... and can easily do it in 6 years as long as you can line up your equity. You are going to need 10-12 great properties... that's 2 a year across 6 years.

It’s obviously going to take $$ to achieve your goal. So you have to look at your resources... savings? Family (as a loan, or an investment Possibly)? Friends with money looking for a better return than the bank potentially? A hard money lender might be tough starting out... definitely network with others at local real estate investor meetings! Pick up their contacts, their resources, partner with them on a deal that you might find and split the profits possibly? It’s all about how dedicated you are.

I went to a seminar when I got started and their mantra was “Flip, flip, flip, buy a rental” It’s a good way to finance your rentals. I can tell you that the first flip we did we netted $50k before taxes. Bought for $70k, invested $30k, sold for $174k in about 3-4 months. There is your 50k in one deal! Sure, you would have to repeat it once a year to keep that income up, but it’s a great way to get enough free cash to buy a rental to start your “passive” cash flow journey.

Oh, and to the poster that was jealous because he was 28, and you are 21, I’m 50, so way more jealous of you both! Lol. The secret is TO START! Don’t just keep thinking about it. Lay out concrete steps... pick up the phone, talk to your family... someone you might not even be thinking of may have the $$ where they are willing to front your venture... you won’t know until you ask / take an action! My mother literally has to take minimum distributions on her retirement accounts... people in that situation (in your circle) might say, hey, I’m willing to take a chance on you?! It takes about $20-$25k to buy a $75k house (financed). How fast can you source that money will determine how fast you start achieving your goal!

All the best!

Randy

I have noticed that the more I research real estate investing, the less "passive" it seems, but I'm okay with that. The numbers you outlined in the second paragraph also seem to be quite achievable in the market I plan on investing in, so I will use that as a reference. Thank you for reaching out, I especially appreciate the advice about potential financing options. That is the biggest hurdle I am facing currently as a college student, but its nice to know it can be done!

0 Votes

All Forum Posts by: Matt Burgess

Matt Burgess has started 10 posts and replied 31 times.

Post: Bank accounts needed for house hack

Post: Househacking if units are filled

Post: Househacking if units are filled

Post: Newbie looking for rehab advice

Post: Newbie looking for rehab advice

Post: 301 Pike Street. (First Flip)

Post: Getting to know your market

Post: Getting to know your market

Post: Getting to know your market

Post: Goal to make $50,000/ year in cash flow