All Forum Posts by: Max Lichtenstein

@Max Lichtenstein

In my market and what I've gathered from investors in other markets, it is very unlikely that you are going to cash flow while house hacking a duplex. Once you move out though, the property should cash flow. 

While you're house hacking your expectation should be too lower your housing expense and could range from $0-$1000 depending on a number of factors. Run two different analyses: year 1 of house hacking while you live in the property and year 2+ after you've moved out and rented the other unit.

Most hot markets don't allow for this, rents just don't reflect. Does not make it a bad deal if it doesn't completely cover the mortgage. You guys are getting help paying down a mortgage, not rent. It's a win in my yes 

There aren't many househacks that are going to cashflow positively anywhere in or near Boston because the market is so expensive. If you are paying yourself through the mortgage instead of paying somebody else rent then you are already a huge step ahead. Also Boston is a highly appreciating market, so after a few years of owning the property (and you potentially moving out and moving into a new househack/property) you're cashflow and equity will increase substantially.

If you look at cashflow markets, these typically dont appreciate nearly as well, so the numbers look better upfront in these markets, but over time appreciating markets and trying to build equity will create so much more wealth for you in the longrun. 

@Max Lichtenstein, contrary to what others may say, a house hack that breaks even or is cash flow negative can still be a good deal. What are you currently paying in rent? In the case of a house hack, you're still paying down the mortgage, hence you're building equity in the home that you'll reap later once you either refinance or sell. One note of caution is to always be careful when it comes to investing with friends and family. Personally, it's not for me, but for others, that may be their only strategy, as seems to be the case for your current scenario. Best of luck! 

@Max Lichtenstein Every market is different and so are the strategies but what you described is quite common. Real estate prices are very high in Boston. I had a friend that lived there for 5 years. He rented with 3 roommates in Jamaica Plain because that was the only way he could afford it. Bicycling around the city was so fun. 

Think about your cost of living and how much the rent could cover. You could DASTICALLY reduce you living expense just by house hacking. It's a sacrifice some people are unwilling to make. You'll living with or next (duplex) to the tenants. It's a real estate investing crash course. It's a big jump start in markets than most people can't afford.

Hi @Max Lichtenstein , great to hear that you're taking this big step.

Analyzing a property like this should be pretty simple and straightforward. Figure out all of your acquisition costs (down payment, closing costs, rehab, start up, etc.), all of your regular projected expenses (debt service, property mgmt, utilities, cap ex, vacancy), your projected income, and then use those numbers to figure out all of the metrics you've heard about—Cash on Cash return, Cap rate, cash flow. Do a lot of reading through forums on BP, watching YouTube videos, listening to podcasts. What are your goals? How long do you plan to hold the property? Crunch these numbers, explore resources, ask these questions, and pretty soon you'll know what your criteria are and will be able to easily analyze, or underwrite, properties as they present themselves, so you can act quickly and confidently when the right one comes along.