All Forum Posts by: Victor Steffen

I'm pretty sure @Arvin Poole is headed to Tulum this weekend to scout out some inventory! 

Like Winn said- bold move which I'm sure will work out great for you long term! 

I assume you'll sell the Norcross house, pocket the $100k, move back in with your parents for a few months while you:

1. find another home to househack and purchase using low down payment financing (fha, va, usda) to preserve your capital stack

2. purchase a rental using traditional 20% down financing (if you have trouble qualifying for conventional debt look into a DSCR loan product).

3. Save some of that cash you you can move into another househack in 2023 and pick up another DSCR funded rental

sounds like a good plan to me! 

@Scott Bottomley - one small correction- I'm not offering on the homes out of the gate but I am reaching out with no prior signs of motivation other than the home meeting my buying criteria. We work the same strategy for our clients as well if they have a specific buy box. 

Regarding conversion- I might message 50 different realtors over the course of a week for a specific asset type and would be very surprised if we didn't close 1 or 2. 

We are paying appraised value for everything- most of these units are turnkey. 

Typically a seller financed deal will have a balloon payment which will require you to refinance or sell the property to pay back the notes within a 18-36 month period. Imagine buying a seller financed deal 2 years ago at 4.5% interest and needing to refi at the current rates. Your cashflow will be erased. Curious to hear what other pitfalls we can look out for when putting together seller financed deals? 

@Lawrence Rutkowski the bulk of our off market deals have come via targeted strategies rather than a shotgun approach. Tactically it looks like this: Identify a specific asset type (we were looking for 5+ bed, 3+ bath, 2500+ sqft, no HOA, corner lot homes in specific zip codes). Look for those assets on the MLS which sold greater than 24 months ago. Reach out to the agent that represented the buying party (they are now the current owners) with an offer to present to their past client.

A few reasons this works 1) the buyer's agent info is easily accessible and most respond to text within a few minutes. 2) The buyer's agent is a warm entry point and the offer is typically given more serious consideration. 3) The buyer's agent is given an excuse to re-engage a past client so there's a very high likelihood your offer gets into the right hands- this is especially valuable when the buying entity is obscured via LLCs which makes finding reliable phone numbers more difficult.

@Nathan Gesner the last few weeks have been better than the last few years for my househack clients. Low down payment offers are being accepted and we haven't had to waive inspections or appraisals. 

I agree it's always a great time to househack- the current environment has shifted more in the househacker's favor recently. Higher quality assets are going under contract with more protections in place. 

An interesting thought from a meetup we attended last night in Austin- this is a prime season for househackers.

Sellers are spooked and the number of offers per listing are down. 

Interest rates at 6 and 7% mean PITI payments are approx 40% higher than when rates were in the 3s. That's a big pill to swallow for most buyers especially owner-occupants using low down payment financing and carrying the debt service on their own.

Househackers are uniquely equipped to thrive in the coming months because the additional income from leased units/ rooms allows us to comfortably swallow the additional interest and we're finally seeing sellers agree to concessions and contracts with contingencies in-place which are essential to protect earnest money deposits (which for many househackers represents the bulk of their cash holdings).

Curious to see how this shakes out over the next several months!

@Nicholas L. you're absolutely right. Prices today are ~20% above where they were even 12 months ago. The market shift hasn't started to impact prices yet (will it ever?) but it has impacted what terms sellers are willing to accept and that has made a huge difference in who can connect on deals.

Hey michael- we are still seeing a lot of properties move above list in DFW, austin and san antonio. These 6 new contracts were the result of almost 40 offers submitted.

Congrats! @Christopher Roper, for our RBTR houses we bill back the utilities split according to the number of rooms. example: if it's a 5 bed house and a total water+gas+internet+electric bill of $600 we will tack $120 to each tenant's rent. 

*NOTE* if there is a vacancy, let's say 3 of the 5 rooms are full- we still split that utility bill 5 ways and eat the cost for the 2 vacant units. I've found this to be the best way. Your tenant did not sign a lease for the entire space so should not be liable for the entire utility bill. Just their portion. 

Good luck!