All Forum Posts by: Tomas Valladares

How long are you planning on living in the house yourself? If its for at least a couple of years you can pay extra on the mortgage towards the principal so when you do refinance at a lower interest rate (though who knows when that will happen) your loan amount will be smaller and it may cash flow at that time. Or say if your rent or mortgage would normally be $1000 out of pocket and now you're paying $300 out of pocket you're saving $700 a month so throw that $700 into a savings account and you can put a big down payment on your mortgage when you refinance to make it cash flow. There is also the potential to raise rents.

If you go to https://www.calculator.net/mor... you can play with the numbers- like how fast will your mortgage be paid off if you pay an extra $50 or $100 a month towards principal. If you have a loan at $250k, 30 year mortgage at 6.5% interest and you pay an extra $500 a month towards principal the loan would be paid IN FULL in a little over 16 years. Pay attention to the amortization schedule- if your goal is to move out within two years you can see how aggressively you need to pay extra to get it down to where it will cash flow so maybe you only need to pay an extra $500 a month for the first 20 months or so.

I think you're on the right track. I hope that made sense.

Hi Beth! Thank you for your explanation and for sharing the calculator. I'm planning on staying in the property for 2 years to avoid capital gains tax when selling. Also, in my market, I don't think I'll be able to save for another down payment in just one year.

I'm interested in the option of paying the extra $500 each month and think that would work with my budget. Looking at the amortization schedule, how were you able to arrive at the estimate of around 20 months for it to be able to cash flow?

0 Votes

Dallas, Texas

Quote from @Devin Gillespie:

One thing I did underestimate was the property taxes. Also be aware that if you are planning to furnish the rooms and market as STRs, Dallas in particular issues a separate occupancy tax for that. I would look for opportunities to add value and increase your rates, which would help keep you living for cheap or free. Best of luck!

Texas property taxes are tough! Since I'll likely be in a college town, I was planning to do long-term rentals but I didn't know about the separate occupancy tax so thank you. I'll keep my eye out for any possible value add properties.

0 Votes

Dallas, Texas

Quote from @Eliott Elias:

Main thing you should focus on is if your monthly payment is less than or same as if you were to rent in the area after roommates paying you.

Okay, thank you for confirming! I'll definitely keep this as a priority.

0 Votes

Dallas, Texas

Hi BP Community!

I am looking for any advice on what to look for when analyzing a house hack outside of my monthly payment. I'm planning to do a rent-by-the-room house hack in DFW after I graduate from college in May of 2023. I've analyzed several 4/2 SFHs by now and am expecting to have to pay around $200-400 a month which is lower than what I pay now for housing. Outside of that, I'm not sure what the typical IRR or CoC return to expect from a house hack is in the first few years. Are these important factors in analyzing a house hack?

Also, I understand that rates are higher now and are expected to increase as the FED warned. Is it wise to rely on the potential of refinancing at a lower rate in a few years in order to cash flow after I move out? I haven't found any properties that would cash flow after moving out if I am putting 5% down. Below is an example of a typical property I am finding in my area. Assuming I can rent out 3 bedrooms for 700 each, I would be covering $313.12 in this example:

https://www.calculator.net/ren...

Again, any feedback at all would be greatly appreciated. Thank you!

0 Votes

Dallas, Texas

Hey Matthew! I would recommend starting out with the Bigger Pockets calculators. While filling out the fields you can hover over the question marks to get suggestions for expenses you aren't sure of. I've also seen people use this calculator: https://www.calculator.net/ren.... I'm also a newbie but I feel that analyzing any property you can find will help build confidence and knowledge of your market when starting out.

If you're looking for books then I would recommend Brandon Turner's The Book on Real Estate Investing. You can also go to the Review & Feedback forum category to see how other people analyze their deals. Hope this helps!

0 Votes

Austin, Texas

Hi Kenneth, thank you for sharing your story! I would like to hear more about how you were able to make your house hack work. I am personally trying to house hack in DFW after I graduate from college in the spring but have been unable to find any SFHs that would cash flow anything after moving out (I can't find any duplexes). Do you still see the traditional house hacking strategy working in the DFW area even with higher rates? How were you able to pull it off?

1 Vote

Dallas, Texas

All Forum Posts by: Tomas Valladares

Tomas Valladares has started 2 posts and replied 16 times.

Post: Rent by the Room House Hacking in DFW

Post: Rent by the Room House Hacking in DFW

Post: Rent by the Room House Hacking in DFW

Post: Rent by the Room House Hacking in DFW

Post: Newbie Looking to Learn How to Analyze Deals

Post: Broke Teacher to Successful REI - My $5M Portfolio Story