All Forum Posts by: Tiara Jackson

Quote from @Brittany Smith:

@January Johnson Thanks and there sure is! Ft. Belvoir is 3 miles down the street. I'll definitely list on here tonight :) 

Hi Brittany! I just purchased a unit in the Mount Vernon area close to Ft. Belvoir. Would love to hear how things turned out with targeting short/mid term tenants. 

Quote from @Stephen Predmore:

Great job! What area is located? Were you able to refi with the higher ARV? What are you hoping to get for rents?

Thank you, it's in Waverly, hoping for $1500 for rent. We just got it in June so haven't been able to refi, but homes keep selling way higher than our purchase price so we feel really good about future ARV! 

Quote from @Amy Heitner:

Nice job @Tiara Jackson, wishing you all the best with your future investments!

 Thank you!! Wishing you much success with your investment journey as well! 

Investment Info:

Single-family residence buy & hold investment.

Cash invested: $2,600

We converted our basement bedroom into a studio apartment as a househack for our primary residence. We rent the space out as a short/mid term rental to minimize our living expenses and super charge our savings for future investments.

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

This was an easy way for us to leverage space we already had to bring in extra income without inconveniencing our family.

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

We started out by renting out a bedroom upstairs but after the first tenant we thought about ways to enhance the house hack, so we decided to close in the bedroom/bathroom downstairs and add a kitchenette to convert it into a studio apartment.

How did you finance this deal?

We invested $2600 into the space to purchase the kitchenette and hire contractors to frame up the door to close in the space.

What was the outcome?

We've been able to charge double what we were charging for the bedroom rental and we've been able to market to travel nurses and short term travelers.

Lessons learned? Challenges?

We have been fortunate to have excellent tenants, we run background checks on all applicants and enforce the rules we have outlined for consistency.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No

Investment Info:

Townhouse buy & hold investment in Baltimore.

Purchase price: $113,500
Cash invested: $43,000

Our second investment property is a single-family townhome, 3bd 1.5ba with partially finished basement. The property is located in an up and coming neighborhood with close proximity to colleges, hospitals, and shopping.

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

This property has multiple exit options due to the proximity to hospitals, colleges, and shopping.

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

We worked with an amazing realtor (Sam Kahl of the Joe Norman team) and the property was found on the MLS. We offered 7k over asking but we're able to get a great deal due to a low appraisal.

How did you finance this deal?

We used conventional financing with15% down. The capital came from primarily savings and a small portion was funded through a HELOC from our primary residence.

How did you add value to the deal?

We did small renovations on this property, to include updating the main for flooring with LVP flooring, and refinishing the upstairs wood floors. In addition we gave the interior a fresh coat of paint along with updating some of the plumbing and electrical for compliance.

What was the outcome?

During the renovation period a few houses in close proximity that were fully renovated sold for around 80k more than what we paid so that helped with making the listing more attractive, also rental rates increased enabling us to advertise at a higher price point than originally anticipated.

Lessons learned? Challenges?

We learned that Baltimore has quite a few rules regarding the rental process, it's not as cut and dry as some other cities so it was a bit of a process navigating that system. Baltimore City requires a lead certificate, rental license, among other reoccurring inspections.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We worked with Sam Kahl of the Joe Norman team and he was AMAZING!! Very informative as he's from the Baltimore area and he was able to connect us with lots of contractors and resources along the journey!

I don't necessarily think it's a "bad" decision. Cashflow for a house hack is a bit different than a stand alone rental. The point is to lower your living expenses not necessarily cover ALL of your living expenses. If you were looking at a property that was going to be exclusively an investment then I would absolutely say this is a bad idea. However, I live in the DC Metro area and am very familiar with the Ballston area and I know it will maintain its value and as you mentioned and is likely continue to increase in value. I have 2 properties and I also house hack my primary residence - my househack covers 55% of my mortgage which is a win for me because there is no way I would find a rental for what I pay in mortgage and the extra income from the house hack is essentially pure cashflow that goes towards acquiring the next property considering i have to pay my mortgage regardless. Only you can define your goals, a house hack is essentially a way to leverage an asset you have to supercharge your savings for the next property. Just my perspective! 

Thanks Joe, great information as always! I actually was unaware that we could not advertise "accepting vouchers". I've seen it on so many post. Thank you for highlighting that as we do want to ensure we are conducting business ethically and adhering to regulations. I supposed the best way to convey that we are indeed accepting them (if we decide to go that route) would he to advertise on the affordable housing website.

Quote from @Joe Norman:

Keep in mind that in Maryland "Source of Income" is a protected class, so you can't advertise that you are choosing to "accept vouchers" - that is akin to saying you are choosing to "accept Catholics" or "accept white people". Your marketing and screening should not encourage or discourage the use of vouchers.

That said, you absolutely can screen based on Amount of Income. In the situation you described in your OP ($1,500/month rent, 70/30 split, requiring 3x monthly rent in income) then yes, you would need to confirm that the tenant has a monthly income of at least $1,350.

Good luck!

Thank you for the reply Erin. I have heard similar feedback. I have been attending the monthly Section 8 Landlord briefings which has been helpful in gathering information and connecting with the people over the Section 8 Administration. I welcome any additional feedback you have on the topic. Thank you! 

Quote from @Erin Dreher:

For screening your tenants you should probably reach out to the local housing office and see what you can require legally. Since its a federally funded program I think there are state laws on what you can require from a tenant. 

In my experience - owners either like Section 8 or they hate Section 8. There are pro's and cons with accepting them. We do work with tenants that use the vouchers and they are not easy to get set up and going in the beginning but after you get them set up they come like clockwork. There is usually a huge lag in time from when your tenant moves in and the housing office processing the paperwork and cutting you a check (2 months). Communication with the caseworkers and housing organization is rather difficult also.

We just bought a property in Baltimore and are getting it ready to list for rent. We have our screening requirements outlined that we typically use, which include that the tenant must make 3x the rent and put down a 1-month deposit prior to move-in. This will be our first time accepting vouchers. My question is when we're reviewing an application from a Section 8 Voucher holder, would we verify that they make 3x the portion of the rent they're paying (Baltimore City pays 70%, Section 8 voucher holders pay 30%).  For example, if rent is $1500 per month they would need to make at least 1350 per month and put down a $1500 deposit since Baltimore City doesn't cover deposits? Just trying to gut-check if I'm thinking about this the right way. Also in response to this thread please share any words of wisdom or advice you have regarding accepting Section 8 vouchers. 

Thank you! 

They will fund the rehab, but I found the deal and will be the boots on the ground managing the project and will 100% completely manage the tenants