All Forum Posts by: Nate Hemby

Hey BP,

I’m reading Managing Rental Properties by Brandon Turner and have a question about pre-screening and rejecting tenants. In this section of the book, Brandon lays out 7 types of tenants you don’t want to rent to because they’re likely to cause issues. 

Let’s assume that a prospective tenant meets all of your pre-screening criteria, but you find that they are one of these types of “trouble tenants” during the showing. Are you able to reject the tenant based on your in-person assessment of them? If so, what do you use as your rejection reason on their adverse action letter?

Thanks,

Nate

Not exactly real estate related, but I'll add in The 4-Hour Workweek by Tim Ferris. Great mindset book on understanding how to design your business to accommodate your life, rather than the other way around. Especially great if you're looking to create a business that allows you to be location independent!

Following as well. I plan to buy close to Dallas proper in December and would love to connect with other investors!

 Thanks for the info @Scott E.!

 That would be the idea! Hiring a property manager is definitely an option if I have the portfolio built. Good idea on the 1031 as well!

@Jack Seilus You'll want to run both! See what it looks like when you're there AND when you've rented all rooms. If you're living there, your cashflow can be negative down to what you would expect to pay someone else for rent - hopefully better than that though! House hacking is about reducing your living expenses first, so if $700 is less than the rent you would otherwise pay, then the potential deals you're seeing would make sense to buy while you're living there.

The question is: what would your cash flow be once you move out? Real estate is a long-term game, after all. As long as you will be cash flow positive after all expenses (including management, CapEx, vacancy, maintenance) and/or seeing appreciation, it's a good deal. How good of a deal can depend on how you value cash flow vs. appreciation, but I'm guessing you're looking for cash flow as a new investor.

Hey BP friends,

I am beginning to search for a property to house hack in the DFW area. If all goes to plan, I'll house hack here and use the BRRRR method for 3-5 years, acquiring 2-3 properties during this time. I plan to move after this time period. If I move out of the area, I'll either sell or hire property management, depending on life circumstances at that point in time.

Traditionally when buying a SFH the wisdom is to not buy unless you plan to own the house for 5-10 years due to selling costs and equity gain from paying the loan. However, this doesn't factor in any forced appreciation or loan paydown from tenants.

So my question is - does this wisdom still hold when you're house hacking? If not, would the breakeven point come sooner or later? My intuition is that it would come sooner due to the appreciation and loan paydown.

Let me know your thoughts!