All Forum Posts by: Nick Kahler

David Greene from Bigger Pockets repeatedly (books, podcasts etc.) makes a strong case for using a house hack as your first real estate move.  Check out the content and let us know what you think!

A partner and I did something like this recently (downtown Phoenix). This may or may not be helpful.. If one of them has decent credit you might put them on the loan to unlock a few possibilities. 1. Owner occupied Insurance is lower, 2. Owner occupied interest rates are lower (1% ish), 3. You might even be able to use their first time homebuyer benefit for a lower downpayment. Instead of deeding to them, form an AZ LLC for $85, deed the title to the LLC (you are the statuatory agent), then add the LLC to your insurance policy as additionally insured. This adds a little bit of protection called inside out from liability. *I am not an attorney, I'm simply describing what I've done recently.

The simplest way is to simply buy the place solo and have them sign a solid lease agreement.

I’ll add one more angle to the discussion in that all of these beliefs about working from home can be true or untrue but they could be a bit short sighted flippers excluded). If we’re long term investors then we should be careful with short term impacts.  Professor and Dean Emeritus of the NYU Stern School, and economist Peter Henry spoke recently on a podcast about the 'end of life illusion.'  I'll paraphrase: 

The concept is that at any point in time we feel stronger about what is happening right now and believe it to be the new standard forever.  We forget that this is not the end of life and that short term changes may have long term impact, but they will not last full force in the long term.  He offers a great story about his belief that eventually humans, as social beings, crave human interaction.  He posits that serendipity never happens over zoom because it happens in chance encounters at an office.  Professor Henry believes that in the medium to long term the draw to human interaction and innovation will draw us back to offices in some scale.  

While commercial spaces will no doubt go condo in the near term, offices, commutes and activity centers will still fight their way back in some scale.  It's up to us to imagine how long this will take, and if this move back will come to major urban areas or simply more, smaller activity centers.  Thanks for all of the thoughts above!

I’m up for adventure! I’m an AZ native as well and believe I can add some value.  Let’s connect!

Usually if HOA increases by a large amount it is usually only a result of a large capital improvement or assessment (think pool, gym, clubhouse major rehab). You will generally see them coming

@JD Randall @JD Randall 25k was down payment, interior paint, carpet stretch and clean then a/c service. I had a partner because he is a good friend and his daughter is the other student. We looked for 30-45 days which made us ready to move fast. I'm new to this as well but what I'm finding is that high HOA cost takes most condos out of cash flow positive, this one was low for the area. I anticipate that we will do counters cabinets and tile around year 5 to make it competitive with all of the new builds but with students all you are competing with is being a better space than undersupplied dorms and showing cost savings. Hope this helps, best of luck!

Investment Info:

Condo buy & hold investment.

Purchase price: $210,000
Cash invested: $25,000

Student House hack current, eventually Student of young professional long-term rental.

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

Turning an expense into an investment by redirecting $11,600 annual student housing cost into an owned asset. Saved, $1,400 per year near term and capturing $500/month in principal paydown. When my daughter and roommate move out we transition to pure long term or student rental at appx. $450/m net monthly cash flow proceeds. Located in downtown metro Phoenix that is undersupplied with condo property with reasonable HOA. Close to Medical Campus, Arizona State Univ and pro sports arenas

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

MLS

How did you finance this deal?

Owner Occupied FHA

How did you add value to the deal?

Brought in one trusted partner to share risk

Lessons learned? Challenges?

University campuses can be undercapitalized with student housing resulting in high dorm cost. Find a property nearby, pay yourself not the institution and rent the remainder to the parents not the students!

Investment Info:

Condo buy & hold investment.

Purchase price: $210,000
Cash invested: $25,000

Student House hack current, eventually Student Rental

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

Turning an expense into an investment by redirecting $11,600 annual student housing cost into an owned asset. Saved, $1,400 per year near term and capturing $500/month in principal paydown. When my daughter and roommate move out we transition to pure long term or student rental at appx. $450/m net monthly cash flow proceeds. Located in downtown metro Phoenix that is undersupplied with condo property with reasonable HOA. Close to Medical Campus, Arizona State Univ and pro sports arenas

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

MLS

How did you finance this deal?

Owner Occupied FHA

How did you add value to the deal?

Brought in one trusted partner to share risk

Lessons learned? Challenges?

University campuses can be undercapitalized with student housing resulting in high dorm cost. Find a property nearby, pay yourself not the institution and rent the remainder to the parents not the students!