All Forum Posts by: Scott Trench

 Hey Jeff,

I just purchased the book and was unable to find any problems.  I'd try the following:

1) Make sure that your browsers are up to date (my successful purchase was made via the latest version of Chrome for MAC OS).  

2) Try it on a couple of different browsers

If things still don't work for you, please send a screenshot of your problem, along with pertinent information like your Operating system and browser (version, year, etc).  Please also let us know what type of card you are using.

You can send that information to [email protected]

Thanks for this!  We will need to come up with a number of quality posts and threads to seed this new forum category.  Please respond with as many as possible.

@Josh Foret

You talk about inconsistent income.  Assuming you get a tenant in there in a timely manner and do your due diligence, you are about to experience consistent income in a powerful way in the form of rent checks from your tenants.  As was mentioned previously, a correctly purchased duplex with a quality tenant should pay most or all of your loan payment, private or traditional.

Isolating house-hacking on its own, income is really only an important factor in the acquisition of financing.  Most lenders won't loan to you if you can't demonstrate an ability to pay the loan without a tenant - luckily for you, this obstacle has been removed due to your advantageous position of having access to a private loan.  In my case, and in isolation to my duplex, my income matters very little.  Between my roommate and my tenants, the entirety of the mortgage is paid, and I have a small cash surplus each month after minor expenses, so the entirety of my earned income can go straight into reserves for the purchase of my next property.

What matters much more to me, as far as my house-hacking business is concerned, is my cash cushion, which you lightly touch on.  I began my investment with just over $20K.  That proved sufficient, but I was surprised at the amount of upfront costs and small expenses that homeowners and investors face - taxes, assessments, energy bill one time charges, etc, etc.  Personally, I think that you should focus on accumulating a more conservative cash reserve before purchasing a property.  After the $5,000th dollar spent on tools, equipment, taxes, insurance, and all those other nice surprises, you might be up a creek if the next few months don't go as planned with your business.

Bottom line is this - you are purchasing a business.  The business should produce the consistent income, regardless of your personal position.  The important thing for the business, in it's early stage, is to be well-capitalized.  Get a larger cushion, then attack the house-hack as a business problem, not a personal income one.

My $0.02.

There are many ways to track your net worth, but overall, they boil down to two simple options:

1) Record everything manually in a giant spreadsheet or other program

2) Automate the process, at the cost of either money or divulging sensitive information.

I've chosen option 2.  I use www.mint.com.  Mint records every transaction, every bank account, everything that has to do with money online. I still have to do some maintenance, but as far as accurately tracking net worth goes, I have a great picture at all times, and review the numbers comprehensively once per month.  The "cost" of this free software is that they use my financial data to recommend and market financial products to me.

A lot of folks are wary of using a program like that and trusting software with sensitive financial data.  If that's you, then recording the data line by line, or paying someone to do that for you is your other option.

Income and expenses are fairly straightforward for the most part.  Categorizing them into their appropriate buckets is called accounting, and must be done no matter what if you want to get useful information out of tracking your net worth.

You also touch on depreciation as one of your expense questions.  Depreciation is one of the trickier parts of accounting, especially when it comes to calculating your net worth.  If you buy a $100,000 property and depreciate it over 30 years, then on paper you are describing a "loss" of $100,000.  But the reality of the situation is that the property still has value - perhaps it's now worth $50,000, perhaps it actually appreciated and is worth $150,000.  In most cases, the property will be worth substantially more than the book value you claim it to be worth on your tax return.  

Depreciation is a great accounting trick and expensing that against your income is great for taxes.  When it comes to calculating your net worth (or valuing a business with depreciating real estate assets), it's less useful.  You'll have to keep a watchful eye on the market value of your property if you want to have an up to date and accurate snapshot of your current net worth.

I don't know about a partial manager - I haven't considered one to this point.  I just can't see many emergencies arising that I couldn't take over the phone and call the plumber, electrician, police, or handyman.  My tenants have called me about various minor issues, and each time, I asked them if it was ok if I took care of it on a prompt timetable, but convenient to both of us.  This includes a minor plumbing issue, screen repair, and facilitation of online rental payments.  That said, everyone is different.  If I was making less than perhaps $50-$100 per hour at my job though, I think I'd be happy with the $200 per month in my pocket for relatively convenient work.

I think that this is a mistake - just my personal opinion though.  One of the great things about being an owner-occupier is the fact that you get to manage one of the the easiest businesses of all time.  I'm not saying that real estate is easy so don't misquote me there, but relative to almost any other business you can purchase that has a reasonable chance at producing revenue, the property manager/house-hacker has to be up there.

Your tenants are right next door - you know if they aren't treating the property well.  You know where the check is coming from.  You can go and fix problems in seconds, 10 feet away.  Maintaining the property is virtually the same as running a household.  

Hiring a property manager to manage my duplex would likely cost me around $200 per month.  Managing the property was a grand total of 20 minutes last month.  

This is a very different story if I had 5 rentals or had rentals more than an hour away, but the managing I do is less than 20 yards from where I sleep!  I'm not busy or rich enough to say no to a $200 per hour job.

@Alex Hamilton

 You can upload new profile pictures here:

http://www.biggerpockets.com/profile/photo

Do you have any other specific questions about it?  We accept standard filetypes, and you can adjust the photo to get things just right.

Hope that helps!

@Linda Weygant

Thanks Linda!  I agree - it's a very good thing that idle cash is a stressor to you in the overall scheme of things, a lot of folks would think that is an incredible luxury!

 @Rhondalette W. Those are also good frustrations to have haha!

Unfortunately, the short answer is no.  No you cannot undo votes.

~ Vote Wisely ~ ;)

We occasionally seem to get some frustrated folks on BiggerPockets. I know this because I was one of them.

I, like many other newbies, was extremely ambitious, frustrated at my lack of wealth and overly eager to jump into real estate head over heels. I saw the forum contributions of seasoned investors and compared myself to the extraordinarily successful regulars here on BiggerPockets and got super motivated, but I also felt inadequate and so far behind these superstars that I thought I'd never to catch up.

I want to say that as one of those folks that discovered BiggerPockets in a time of frustration, I've now come to realize that comparing myself to these gurus and investors with decades of experience is foolish. It would take an unlikely and unreasonable effort to match their results in very brief amounts of time, though they are the first to tell you that their results can and will be repeated by investors time and again.

But recently, I've come to adopt a more grateful worldview. See, I've got someincredible advantages that I took for granted.

As a volunteer with some local nonprofits, I get to work with, teach, and learn from those with even less experience in money management than myself. There are folks that I've worked with that have never experienced savings, never invested in the stock market, never bought a home, and in the case of some extreme examples, have never even opened up a bank account. Think about that - there are folks out there, and more than you think, that have never had more wealth to their name than the cash they had on their person in their entire lives.

As members of BiggerPockets, many of us have incredible advantages over our peers that we completely take for granted! I was truly unable to appreciate this fully until very recently, and thought I'd share some of the incredible advantages that I once took for granted here today:

- Ability and comfort to open a bank account, write a check, and manage money online

- Ability to obtain a credit card, debit card, and to access ATMs

- Ability to prepare a budget and earn a regular paycheck

- Ability and comfort with discussing the concept of "investing", much less specifics of real estate investments and terms like "ROI"

I'd encourage anyone else who feels frustrated with their current financial position to take a moment and jot down some knowledge or advantages that you've taken for granted.

Remember that no matter how far ahead others seem, the opposite is also true. We are very lucky to be in positions in our lives where we may compare ourselves to BiggerPockets investors with decades of real estate experience and feel inadequate!