All Forum Posts by: Matthew Brill

You are looking for funding to do some repairs? What are you building a wall for? I'm not advising this since I don't know your personal situation, but you could probably find some credit cards that offer introductory 0% APR. You might get 12 months to pay it back but you'll have to make sure you have a strong plan to pay it back on time or you'll be paying high interest rates.

The seller definitely can't keep the security deposit. It should've been paid to you at closing.

I haven't dealt with this specific situation so I'm not entirely sure, but my guess would be that since it is you place of primary residence that would supersede any other issue. I'm not even sure it would actually be a situation that goes to eviction court. If it were me, I would search for a property that fits my criteria whether it is tenant occupied or not. If you find a property that works, make an offer and get it under contract. If it's tenant occupied, then work with the seller to see if they can get the tenant out. If you still run into issues still I would then reach out to an attorney and find out your rights/ask your questions. But I wouldn't let it get in your way. There will be a solution.

If it doesn't produce positive cash flow when fully tenant occupied then I would be very hesitant to move on it. That can be the problem when do the SFH house hack, when going from renting by the room to renting the entire house you may get less gross rents. You can look to keep renting out by the room (like to college kids) or STR to boost income. Other wise just have to be patient. And maybe start looking at more 2-4 unit deals.

@John Castle

I have made my own analyzer/calculator geared towards house hacking. I could go over some of the other related information too. Let me know if you're interested.

You should have no problem getting to occupy a unit since it is your primary residence. I wouldn't exclude occupied properties from my search.

I would go with the duplex and fund with the 3.5% FHA. You will get a higher ROI and have cash reserves to start plus money to invest somewhere else. But if ROI is less import to you than cash flow then putting down 20% could be the better option. With PMI, ultimately you just have to include it as an expense. If you still have lowered living expenses and positive cash flow when you move out despite the PMI then you're good. The other potential with only 3.5% down is that you could potentially buy a property and use your left over cash for forced appreciation. Then maybe you can refinance out sooner.

The more you put down the easier it will be to live for free, no matter how expensive the property. But you have to compare it to the potential lost opportunity cost of those funds and ROI (particularly once you move out). Personally, I would be alright not entirely covering my living costs as long as they are lower (compared to not house hacking) and it will be cash flow positive when you move out. If you would normally pay $1000 for rent and with the house hack you still pay $500, you are still saving $6k/year. Plus you can be gaining equity. You will still pay $6k/year in housing expenses but it is just for 1 year and then you move out and turn it into positive csh flow.

Lowering expenses but not offsetting them with a house hack can still be a win. The thing I would focus on would be the exit strategy. Are they going to want to live in it long term (more than 5 years)? If not, I would make sure that it at least breaks even when 100% tenant occupied (PITI and maintenance/vacancy/management fees/CAPEX). There are a few other variables too that I'd be happy to discuss with you.

I have done one house hack that was fully occupied. I didn't have a problem getting the tenant out. One thing you can do in the purchase agreement is have a clause that the seller deliver the property with your unit vacant. Also, ask the seller to see a copy of the tenant leases, you'll know when the leases expire. You wouldn't necessarily have to evict, if the lease is expiring soon. And you are purchasing the property with the intent to move in. If there is difficulty moving in because of a tenant you won't be violation of your loan covenant.

Woah! Don't hate on the house hacking!!