All Forum Posts by: Ryan Thomson

@Ethan Tramel

I can't give advice for Chicago as I am located in Colorado Springs, but House Hacking is amazing. Here are some resources I found really helpful on my journey:

1. For podcasts I really like the House Hacking episodes on Bigger Pockets Podcast and other channels. Here is a playlist with the best House Hacking Podcasts I’ve found: https://open.spotify.com/playlist/4A6uLsPfdWEMmJhG4TSjyb?si=743bb403548f47fb

2. Great beginners guide: https://www.biggerpockets.com/blog/wp-content/uploads/2022/08/Ultimate_Beginners_Guide_BiggerPockets.pdf

3. The Book on House Hacking Strategies by Bigger Pockets is also a fantastic book

4. Happy to talk if you want more advice

5. Connect with a realtor who understands house hacking and has invested themselves

6. Connect with a lender to see what you qualify for and how you can improve that situation

7. Go to local Real Estate meetups and learn from people there

Hey Braden,

I would still put the low down payment down even if you have the 20%. 

1. Interest rates are 6.5%. Do you think you can beat that return somewhere else? Like the stock market OR another property elsewhere. Probably. I would keep that extra 15% and invest it elsewhere. 

2. If you are trying to avoid PMI. PMI is so unbelievably cheap that you could put that 15% in a US Treasury Bond and more than cover the cost of PMI.

House hacking is tough to cashflow in year one (with current house price run-ups and interest rates) for a couple reasons:

1. You are living in one of the rentable units

2. You are only putting 5% down so your loan amount is much larger and therefore your mortgage payment.

I would consider your net worth ROI. What I mean by this is considering how much your down payment returns to your net worth (appreciation, loan paydown, tax benefits, AND rent avoidance). Don't forget to include rent avoidance in your numbers! You have to live somewhere.

@Jack Seiden I think more cities will continue to allow non owner occupied ADUs and change their zoning laws. I read in the paper today that we are 7million housing units short in the US. Cities are struggling with affordable housing. 

In Colorado Springs, we recently allowed more lenient ADU rules.

@Danny Sanchez I encourage clients in Colorado Springs to use these programs all the time. It is FREE money. 0% interest loans that you only have to pay back when you sell the property or refinance. There is no better way to reduce the amount of cash you are risking to get into a multifamily property.  I would highly encourage leveraging a DPA program. 

@In Cho I would reach out to @Paul De Luca. He's a great house hacking agent in Chicago that could walk you through all of these questions. 

@Ian Stromski you should absolutely House Hack with a VA loan. It is difficult to combine a BRRRR with a house hack. Especially for your first one. I have a couple thoughts:

1. Finding a good BRRRR deal often means you found the deal. Anyone who finds a deal good enough to BRRRR is probably going to keep it themselves. This requires expense, time, and marketing.

2. House Hacking - especially when combined with 0% down VA loans provides tremendous returns on the very small amount you have invested to purchase the home. Don't pass up those returns tryin to hunt down a homerun BRRRR on your first deal. Get into real estate investing with a House Hack double.

3. If you find a BRRRR later you can certainly do that then.

@Jacob Zivanovich I think the strategy of not telling tenants comes from someone who is worried they won't be able to keep strict boundaries or have hard conversations to hold tenants/roommates accountable. If you are mature enough to do that (which I bet you are), you should have no problem with tenants knowing you are the landlord. 

@Erik Reis I would do a 5% down conventional loan. Rent out the other units and scale when it makes sense/is possible. Keeping that cash around is a great idea and will make scaling much easier.

Another interesting strategy could be assuming a loan. In Colorado Springs, we have a lot of properties that are eligible for assumption. Meaning you can take over the loan balance and interest rate. If the purchase price is more than the loan balance (it probably will be) you will have to cover that difference in cash. That difference is the "equity gap".

In Colorado Springs I am finding plenty of properties with interest rates between 2.5-3.5% that require less than 50k to cover the equity gap. I'm guessing the same would be true for your area.

@Kieran Dowling I know in Colorado Springs we have some great programs for down payment assistance. If there are down payment assistance programs in your area then you will more than likely be able to use that on a triplex so long as you plan to buy it as your primary residence. Do some googling for your area and ask lenders in your area.