All Forum Posts by: Noah Bacon

All great responses to your question, and completely agree with everyone above.

I have 2 properties in HOAs and the barrier to entry was substantially lower in my market than a single family home not in an HOA. I have restrictions on both that do not allow any sort of "vacation rentals" and a minimum 6 month lease requirement. Analyzing these properties, I knew my only option would be a long term rental. If you are able to go onto the HOAs website and download their CCRs, you should be able to get a clear idea on what their rental policies are.

You also mention the low fee of $50 / month for HOA fees and though it may look very cheap on the surface, you have no idea how the communities financials have performed over the last few years and you may have HOA fee increases annually. When I bought my first property, the HOA fees were $166 / month and this year they jumped up to $329 / month! You can dive into the specifics of that here if you'd like to see why they jumped so high YoY.

What I'm saying is, HOAs are a lower entry point of course, can be lucrative if you analyze the deals as traditional long term rentals....BUT, you ultimately have little to no control over specials assessments, HOA fee increases, and even rule and regulation changes that can impact your investment.

Hey Francisca! Welcome to BiggerPockets and thanks for joining!

Here are some tips for networking and making the most of your account.

1) I'd fill out your profile fully before you do anything else! As that will at least help folks that you reach out to know that you are a real person, with a picture and professional bio. Particularly be sure to include your goals for real estate investing so that folks can help you.

2) Follow your favorite forum topics and set up keyword alerts! Adding keywords related to your investment strategy or market locations can be updated in your settings. You’ll receive notifications when there is conversation in the forums you follow or if a user mentions those keywords—so keep them updated often!

3) Check out some of the local meetups that you can find in this forum! There are so many so be sure to filter by your location.

4) Review Dave Meyer’s The State of Real Estate Investing Report 2024 (in your resource page as a member of BiggerPockets!) for real estate investors available to all BiggerPockets members!

5) Consider meeting with a few agents in your area even if you are just getting started! An investor friendly agent can do all sorts of helpful things, like setting you up with a search for properties or connecting you with folks who have recently done deals like the ones you want to do.

6) Consider analyzing a deal or two in your local market, just for practice, with a free use of our Rental Property Calculator (or other calculators).

Hope this helps! Please reach out with any questions you may have!

Hi Claudio!

If you rent by room, chances are you are going to have higher cashflow than renting out the entire property as one.

You will be having more than one lease in the house, so there are a lot more moving parts that can increase your chances of vacancy and maintenance issues. I know a lot of very successful investors who rent by the room house hacking and continue to rent by room after they move out to increase their monthly cash flow. @Danielle Daly does this extremely well in Denver, CO and I'm sure has a few golden nuggets on how to mitigate a few of the cons I mentioned by being a very good operator. 

I have rented my properties by room while I live there and turned them into long term traditional rentals at move out. I definitely could've tried to maximize my monthly income by renting the property by room, but with HOA restrictions and my inability to comfortably find a property manager that manages rentals by the room were my biggest reasons to rent out the entire property under one lease.

 Thank you, Jay.

@Becca F. I just sent you a message and would love to discuss the details of your interactions with this user.

 Hi Taifita!

I just sent you an email with a password reset. Follow the link in the email to update your login, and please let me know if you have any issues! 

Hi Sarah, 

Great questions to ask before you close on your first rental property!

1. Finding quality tenants is certainly a legitimate concern that every investor has had at some point in their career. Doing your due diligence up front will mitigate a lot of your concerns.

The first thing I would do is start analyzing the rental market that you are looking in to get a feel for comparable rental rates. I'd start with looking at 10 properties for rent in your market that would have the same (or very close) bed, bath, square footage, and amenities as the property you have identified. If you don't set the rate dramatically higher than your comparable properties, then your chances of finding tenants will increase. 

To mitigate concerns of placing a bad tenant, set your application guidelines as strict as you need to feel comfortable, and STICK TO THOSE GUIDELINES. The number one reason I hear when a landlord has placed a bad tenant, is due to the landlord loosening their guidelines after the property has sat vacant longer than they expected. 

2. Save up at least 3 months of reserves before you close. This emergency fund should not only cover you mortgage expenses, but will give you a safety net in case something does go wrong after your tenants move in. I have typically seen in my own portfolio that tenants will put in a few maintenance request early on, and eventually settle in causing a few unexpected invoices. But, your reserves will mitigate the stress of the inevitable maintenance call and have you fix the problem without it coming directly out of your income. 

Talk to some local property managers on their screening guidelines and even inquire how long they are seeing their properties sit on market to really sharpen your decision!

 Hey Brock,

I am glad to hear you enjoyed the webinar yesterday! If you use the code PMLIVE24 at checkout you will get 20% off ($312 at checkout) your first year of Pro. I hope this helps, and let me know if there is anything else I can help with!

 Thank you for your response, Bill! I am certainly afraid of the unknown, which would include those fees eating up the equity that I have built to date. As stated in the post, I am definitely leaning very heavily to investing in another house hack and building up the equity further for future plans. 

 Thanks for the reply, Matthew! I am a Lehigh Valley native too (Emmaus), and am looking forward to coming back to the area to invest in and also call home. I am certainly leaning toward house hacking again, and will likely be looking at the end of the summer/early fall.

I think that the obvious answer here is to House Hack, but hear me out and please tell me what you would recommend!

I have house hacked 2 single family homes in Colorado Springs, moved out with both rentals cash-flowing very modest amounts annually, and am actively looking for the next property around Allentown, PA.

My 2 options: 

Add to my portfolio and House Hack for the 3rd time

I know that house hacking will be the easiest barrier to entry around a big down payment, has the chance for a lower APR with a primary residence loan, and I am comfortable using this strategy as I have done it twice in the last 3 years. I am looking at a 2 year horizon before I would move out and turn the property into a LTR to add to my small portfolio whether it be a SFH or a small MFH (4-plex would be my max).

I would have about $30k - $40k for a down payment, closing costs, and a few months of reserves. 

Sell my portfolio and scale into something larger

Over the last 3 years house hacking I have accumulated a decent amount in equity that I am very proud of, but am extremely hesitant in touching the equity to scale my portfolio at this time. 

I would have about $100k - $120k in equity before agent fees, closing costs, and capital gains tax if sold. I would not be eligible for a 1031 exchange, and when looking at refinance rates on 3% and 5.5% rates respectively, the numbers would not make sense to keep the properties and scale. 

Where my head is at and my future goals with REI

I am very hesitant to sell off cash-flowing properties and have the voice in my head saying "if it ain't broke, don't fix it". I have also never been in a position to have a substantially larger down payment in order to be considering a different REI strategy that house hacking.

I am investing in REI for my families future and have absolutely no intent of looking to "get rich quick", replace a job, or use father time as an excuse to make hasty decisions and potentially leveraging myself too far. I know so many investors that have "x doors" that will always be a number greater than I am actually looking to achieve.

I guess what I am wondering is if I am not being as ambitious as I should be to look for those larger deals, or if I should keep looking to add singles instead of home runs to reach my goals in this long journey.

Thank you for reading this, and if there are any other investors, like me, that feel like they don't know their next step please share your story! It is always extremely eye opening to see how our community can creatively find solutions as one.