All Forum Posts by: Ryan Thomson

@Justin Brown you have to pay to live somewhere! Buy real estate and wait, don't wait to buy.

I wonder if your criteria may be a little unrealistic for the current market.

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.

You may need to lower your return or cashflow expectations so you can get into a house hack that will allow you to avoid throwing rent money away every month. You know this, but don't forget all the other ways real estate makes you money. Paying down your mortgage and owning an asset that will appreciate over the long term.

If you are paying close to what you pay in rent to cover PITI and expenses then owning a house is a much better financial decision than renting.

Hey @Shuvrajit Mukherjee you have a couple options. 

1. FHA 203(k) loan

2. Conventional Rehab Loan

Both of these allow you to finance the cost of the rehab to an owner-occupied property on a 30 year fixed rate loan.

Thanks @Katie Miller!

 Good work @Zac Kucharek!

@Alison Olson  I wish I was thinking like you as a student!

I imagine as a student you don't make a ton of money needed to qualify. I could be wrong but most don't. 

 Here is an interesting idea. Use your knowledge and drive to convince your parents (or other co-signer) to get a home near your college. Co-sign with them and put some money down with them if you can.

Buy it as YOUR primary residence with your parents as the co-signers. This would allow you and your parents to only have to put 3.5-5% down. Then you rent out the rooms to your college friends. This will probably allow you to live for free and your parents to avoid a dorm or expensive home payment while you are in college. Not to mention you can both cash in on appreciation and loan paydown.

If you really wanted to scale, you could do this each year. Rent out the last house to a new group and move with your friends to the next house. This is a great way to scale and you only have to put 5% down if its your primary residence each time.

You obviously need to convince your parents or (someone who would co-sign and help with the downpayment) about how good of an idea this is. But if they are savvy money people and they trust you (which I bet the do), then this seems very doable. Maybe give them part of the equity or a monthly fee until you refinance and get their co-signing off the loan.

@Rahul Kini I don't have NJ specific advice except that house hacking is often a better financial strategy than renting. 

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

@Hunter Broschinsky it sounds like you are asking for two things. 

1. How much did adding an ADU add to the value of my home? and

2. How can I figure out what to rent it for?

For number 1. Finding comps is one strategy. Paying for an appraisal is another. Not sure any of this is of value to you unless you are going to try to refinance. 

2. Surely you can find rental comps for long term rents in the area. See what people are charging on Zillow, facebook, craigslist for something similar. Also, you can make a post, start high, and see if there is any interest. If there is not then start lowering the price. You could get a property manager's advice. Lots of options there. 

For the STR strategy I would use pricelabs or airdna and see what comps like yours are making.

 @Angelo Revercomb you are welcome!

1. Conventional doesn't have PMI for the life of the loan. FHA does. FHA only allows you to have one loan at a time within a 100 mile radius. If conventional changes its rules again about multifamily than you still have the FHA option to buy a duplex in the future for your next house hack.

2. I know how these work in Colorado Springs and Colorado. However, there are different programs everywhere. Here you will apply with your lender who will hold your hand through the process. If you make less than 150k you can qualify for a 0% interest downpayment assistance that will cover a very large portion or all of the downpayment. 

Thanks @Benjamin Carver!

Great idea @Nicole Masters