All Forum Posts by: Chace Fraser

Hey @Lance Nelson, congrats on getting your license! At this phase of your journey having the mindset a la Robert Kiyosaki of "work to learn instead of work to earn" will pay huge dividends down the road. Also, you'll find that many of the mainstream brokerages aren't necessarily interested in working with investor agents.

If you're looking to invest AND be an agent, find an agent who's doing the type of investing or working with the types of clients you'd like to. I was interested in multi-family investing and house hacking... and you can only imagine the confused look on mainstream agents' faces when I said I wanted to work with house hackers (Who? What???). The brokerage name on the door is less important than the person you work with.

Feel free to reach out if you have any questions or would like any help/direction!

@Addison Robertson Welcome to BiggerPockets! BP is a great place to find people, both virtually and in real life, who are doing the type of investing you are looking to do. You can find local meetups in your area by going to Network>Events up in the menu bar. I’ve found that people in the BP community are incredibly friendly and willing to help.

@Tony Clark hit the nail on the head. Start messaging agents on here who are in your area. Connect with them either in person or via zoom. 

When it comes to selecting a realtor to work with some may ask you to sign an agreement that you work with them exclusively. This is nice for the agent because it's really frustrating to work with and educate someone for an extended period of time, show them a bunch of properties, and then find out they used another agent to purchase the property. It's not bad to just ask a realtor questions. However, it is courteous if you are going to ask them questions, you let them know you're just educating yourself before you purchase (and if you are speaking with other agents) and to offer to buy them coffee/lunch/a beer. If you like them, and they seem competent, then use them. If you're comfortable signing an exclusive agreement with them then do so. If you do sign such an agreement you can usually terminate the agreement at any time simply by notifying them in writing (email works). 

A good way to weed out agents would be to ask them if they've worked with house hackers before. If they say "no" or "what's that" then move onto the next!

I agree with @Kyle Keller. Also check out craigslist and google "rooms for rent (city)". You might also call the zoning department back and speak with someone else. In my area, depending on who you speak with, we get completely different answers to the same question from people who work in same the zoning department

@Drew Smith I would reach out to @Michael Haas. He's an investor and realtor in the Seattle area. He's helped a lot of people succeed when it comes to investing in the Seattle area (both traditional investors and house hackers alike).

@Rob L. As Jaron mentioned, if you've lived in it for the past 2/5 years you can sell it and avoid some capital gains ($250k if single, $500k if married). 

And let's think about the numbers. I don't know where the $750k in debt is (if it's attached to one of the properties) that you were discussing earlier but let's look at different scenarios:

If you own the home in the nicer area free and clear, and let's say you could walk away with $900k if you sold it, and you're currently renting it for $20k per year, your ROI is 2.2 percent... not even keeping up with inflation...

If you own the home in the nicer area free and clear, and could take all that cash and reinvest it (let's just call it $900k), you could purchase a property in the $4 MM range and certainly achieve more cash flow than $20k per year and enjoy an asset worth $4 MM that appreciates at the same rate per year. 

If you own it free and clear, and don't want to incur debt, sell it, take the money and buy a 4 plex in the area and you'll instantly double your cash flow (probably more, actually).

If you're okay with debt you could buy multiple multi-family properties, increase your cash flow, and then create a plan to 1031 up and out from those and actually achieve financial independence in 5 years or less with ever increasing cashflow.

I'm more than happy to help you develop this strategy (and adjust it depending on the amount of debt you have) to help you expedite the process of getting you to financial independence SOONER rather than later. Send me a DM and we can chat.

@Ryan Gochenour a la Robert Kiyosaki, "work to learn instead of work to earn". Find a broker you can work under who is doing what you want to do... whether thats an agent who is a one person show or runs a team that generates $1,000,000 per year in GCI. 

When I got my license I signed on with a couple that was doing a lot of multi-family investment deals and they owned a property management company.

I chose this brokerage because my goal is to have a portfolio of income producing assets. I jumped at the opportunity to learn the multi family transaction world with them and am very happy I did so. I gave up a major portion of my commissions to be with them and it was worth every penny!

And to reiterate what @Sean O'Dowd said, become a master of asking questions... ESPECIALLY the ones that you think are dumb and/or make you feel dumb. If you don't ask these questions they will come back to bite you later... and then you will look incompetent and will lose trust with people.

Hey @Edwin Hidalgo congrats on getting into the game! I'm not a lender, and if you're looking to house hack again, my understanding you only need to live in the property for one year and then you can start looking for another. If you live in it 2 years there are major tax benefits if you're going to sell it in the next 5 years. However, if you've only lived in it a year or two qualifying for your next house hack could be tricky because your DTI ratio might be a little off. You need to speak with your lender about this to find out the real answers. Send them an email now and set up an appointment. This is your real first step. If your lender sucked contact another one.

I agree with @Landon Bleau on how to save money: cut expenses, rent out a room, find a side hustle. I drove Uber and Lyft for a couple years and it really helped me make a little extra cash AND learn the market.

@Rob Tyse above what @Brad Hammond said I don't have much to say other than the beauty of house hacking 2-4 unit properties is that the bank will allow you to count that income towards yours thus helping you qualify for more. With an ADU that's (usually) not the case so you won't have as much purchasing power.

Hey @Mark Alston , the financing part of house hacking is the most important... if you don't get it right you can paint yourself in a corner and it will take a long time to scale. And it sounds like you're talking about the conventional home possible loan, correct? That was the loan product my wife and I used to purchase our duplex... and we had a strategy very similar to yours. 

As you probably know, for the most part, you can only have one FHA mortgage in your name at one time. There are exceptions that are few and far between (like if you were moved to another area by your work), but for the most part it's only possible to have one at a time. If two people are on the same FHA loan, then this counts as their one FHA loan.

One strategy is to leapfrog who is on the loan/purchasing the property and on title (only having one person, not both, on the mortgage and title of a single property). How this would work is one person would buy the first property with their FHA loan, and then when you're ready to purchase the second property, the other person could purchase it with their FHA loan. Yes, this does present the challenge of both individuals needing to be able to qualify for a loan on their own, but it's a great way to do it. Then, when it's time to purchase the third property, you could refi out of the first FHA loan (if you have enough equity), and then use your FHA loan again, or use a conventional loan product.

This strategy is not without its challenges. One person must be able to qualify for a loan on their own. It works well in Oregon because we’re a personal property, not community property, state. This means that when one of us goes to get an individual loan, the bank will not look at the other person's debts/liabilities.

My wife and I are leapfrogging but doing it slightly different than explained above. Our first purchase was a duplex and we used a 5 percent down conventional loan (again, only one person on the mortgage/title). The next property will be that same conventional product (if we still qualify for the home possible) purchased by the other, and then the following properties will be purchased with an FHA loan. Using the conventional product first does a couple of things for us:

• We won't have to refi out of the FHA loan to eliminate PMI
• Once we reach 20 percent equity PMI will go away
• We still have our FHA loans available to use

If you're single, or just don't have another person to leapfrog with, or one person alone doesn't qualify, you could purchase the first property with the 5 percent down "home possible" conventional loan, and then purchase the second property with your FHA loan. Game Planning for multiple house hacks can get a little tricky.

The best person to speak with would be a lender who is either an investor themselves and/or has worked with house hackers before. They're going to know all of the rules, gray areas, and will help you be able to game plan correctly.

BP is a great place to find lenders like this... or at least people who know lenders like this.

Best of luck and feel free to reach out with questions!

If you are using a low down payment option, it's not really realistic to expect to be cash flow positive while you’re house hacking and living in the property. However, if your house hack reduced your housing costs from $1,200 to $600 per month, would that not be a win? That would create an extra $600 per month of “cash flow” that you could save and invest in your next property. Keep in mind the property must cashflow after you move out for the deal to make sense (in most scenarios). When an investor is looking at being cash flow positive, they are typically putting down 20 percent or more. If you are in a high demand metro area, it's simply not realistic to expect to be cash flow positive if you are putting down 0-10%.

Now if that is all the capital you have, that is what it is. Is it better to keep renting than to buy? Typically it is better to buy. Better to build your own equity through the debt paydown, enjoy the tax benefits of ownership, and garner the equity of an appreciating asset. You just can't expect to cash flow on an initial purchase with a low down payment. Now with time and rent growth, what could be a negative cash flow property might very well become a cash flow king, but that takes patience.

Another way to increase cash flow would be renting out rooms in the unit you live in, either Airbnb or longer term.