All Forum Posts by: Matthew Brill

I agree with @Dan Maciejewski. It depends on what your goal is with the house hack. You might not be able to get you housing expenses covered in full, but you may be able to decrease your expenses compared to renting or buying. For me the important thing was that I would be cash flow positive when I moved out. Even if you still have some expenses while living in the property you'll capture the value at today's prices and will be able to capture some appreciation given your market (depending on the neighborhood of course). I did a house hack in a similar kind of market (Delray Beach, FL). It is a triplex and when I lived in it my effective housing costs were only a couple hundred dollars less than had I rented. But I moved out and I only make $100/month on the entire property but the property has appreciated almost $300,000 in 4 years without any value add. 

Thanks @Gaetano Ciambriello. Yeah, I was pleasantly surprised haha. It definitely makes me feel better about the low cash flows. 

Hey @Will Fraser. The property I chose was a large rehab; all major systems replaced, floors, and cosmetics. After finishing, they took their time to get a tenant in and then 3 months later COVID lockdowns hit and Section 8 office closed which cost me another 2 months vacancy. After a tenant moved in, there were another $2000 of repairs that I thought should have been taken care of in the initial rehab. I did eventually get them to reimburse me those expenses, but the communication has been sub par and there has still been more expenses since then. 

Thanks Forrest. It was also 2016, right as the market there was about to take off so that also helped me.

Thanks Ben! It's in the Crestwood neighborhood. I was in OKC at the time and would drive by from time to time, but the GC really managed it all and would FaceTime me from the job site. 

I wouldn't say it was down to the studs, but it was definitely more than $50k. The loan I had included purchase price and some rehab costs, so the $50k was that down payment plus what I went over. Total rehab costs were closer to $62k. I also had a great, investor friendly contractor I found.

I'm still planning on buying some SFRs and considering getting into the mid-size multis. I'm also investing more in syndications these days.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Boca Raton.

Purchase price: $615,000
Cash invested: $15,000

Duplex in east Boca Raton
1999 construction
2- 3 bed 2 bath units

What made you interested in investing in this type of deal?

Upgrading my living quality and subsidizing my living expenses.
Appreciating market with good school zone, near the beach and downtown area.

How did you find this deal and how did you negotiate it?

MLS. Negotiated through agent based off of comps.

How did you finance this deal?

100% LTV physician loan.

How did you add value to the deal?

None.

What was the outcome?

Still live in one unit. Inherited good tenants. Slowly raising the rent to market value. Recently refinanced the mortgage decrease my payment by $600/month!

Lessons learned? Challenges?

Don't wait to buy real estate, buy real estate and wait. When I bought the house the appraisal came in $15,000 under contract. I had to come out of pocket $15,000 as the seller was unwilling to negotiate further. I knew the appraisal wasn't true market value. A year later the property appraised by plenty. I got to renegotiate my deal with a lower interest rate, increasing my cashflow.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Oklahoma City.

Purchase price: $56,000
Cash invested: $50,000

1924 duplex in metro OKC.
2- 3 bed 1 bath units

What made you interested in investing in this type of deal?

This was my intro into real estate investing. I was looking for cash flow.

How did you find this deal and how did you negotiate it?

Found it on the MLS. It was being sold by an estate. It was way over priced. I made an offer that wasn't low enough. It got accepted instantly and I thought I was in trouble! After the inspection I was able to get the price down a lot.

How did you finance this deal?

Conventional loan, savings

How did you add value to the deal?

Torn down walls to open it up, resurfaced floors, remodeled kitchens, painted, installed HVAC systems.

What was the outcome?

Got the place rented out (raised rents to market) and it cash flows great! The property appraised for $180,000 a couple years later and I was able to get a HELOC.

Lessons learned? Challenges?

The rehab went over budget (obviously), but I was able to create more value and get rents higher than I initially expected. I had difficulty with my first property manager that I eventually had to fire.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Delray Beach.

Purchase price: $650,000
Cash invested: $15,000

Triplex
1- 3 bed 1bath and 2- 2 bed one bath units
100 yards from the intercoastal

What made you interested in investing in this type of deal?

This was my first house hack. I wanted a nice place to live that would also subsidize my living expenses. I thought this area would be a good location for potential appreciation and the location would always make it easy to rent. Potential future use as a short term rental.

How did you find this deal and how did you negotiate it?

MLS. Made a low offer and negotiated off of the inspection.

How did you finance this deal?

Owner occupant loan, zero money down leveraging an investment bank account portfolio (my mom's).

How did you add value to the deal?

Replaced front doors, painted, changed out the floors, other minor cosmetic changes.

What was the outcome?

I have since moved out. I am in the process of refinancing due to lower rates and lots of appreciation (the property appraised for almost $1 million!). The new mortgage will increase my cashflow by about $400/month.

Lessons learned? Challenges?

I inherited the tenants when I bought the place and they were a huge headache. They were used to their living conditions and below market rents. After bringing the units up to market they were unaccepting of the higher rent rates and caused some trouble because of it.

Investment Info:

Single-family residence buy & hold investment in Jackson.

Purchase price: $110,000
Cash invested: $24,500

Turnkey Property.
4 bed, 2 bath 1572 sq ft
Section 8 rental
Pro forma cash flow was $135/month with CoC 6.6%. After getting a signed lease, estimated monthly cash flow minus reserves is $434/month, CoC 21%!

What made you interested in investing in this type of deal?

Cash flowing property to balance my portfolio out against other higher value, lower cash flow properties.

How did you find this deal and how did you negotiate it?

Found a turnkey operator I liked, followed their deals for a few months until I found one that meet my criteria. No negotiation.

How did you finance this deal?

Conventional Financing

How did you add value to the deal?

Non value add

What was the outcome?

Still renting.

Lessons learned? Challenges?

Have had some issues with the property manager that I'm still working through. There were more maintenance issues at the beginning than I thought was reasonable for a large renovation. And not the best communication from the PM.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I found the turnkey provider through a marketer, Jason Hartman.