All Forum Posts by: Zachary York

I do house hacking in Georgia as well, Conyers is my original home town. I pulled the GAR, made edits, and read through it myself with as much scrutiny as I could and went with it, haven’t had any issues, but I also screen tenants so vigorously that an issue should never arise. Biggest thing to me to have in a contract is a severability (however it’s spelled) which states that if anything in this contract is deemed illegal, the remaining clauses of said contract still apply. This doesn’t warrant putting whatever you want in there, I’d at least try to have a standing contract, but with this clause, it really saves you on litigation if there’s some iffy parts of your contract. Another big thing is to find people that will pay rent, period. You choose your tenants.

@Ethan Henning @Stan Sugarman Thank you both! I plan to be there later tonight as it’s right down from the office. 

@Julian Joseph

I did a conventional mortgage. 3-5% down (I legit can’t remember, it was all so new to me, and some of closing costs were seller paid), 5 bed, 3 bath; still currently living there now. 

No major repairs or anything, but a decent amount of handyman like work that I keep up while I’m living here. For instance the laundry room was divided into three closets and a very small “hallway” where the washer and dryer sat, so I took out some walls. Otherwise I’ve been blessed with the minimal work needed. The previous owner lived here 20 years and made it their home, so looking for something similar to that may get you a well maintained property. 

Looking forward to coming to these on a monthly basis!

Seems I just got involved in BP after the last big meetup and would like to do everything I can to create a recurring meetup to share ideas, knowledge, and hopefully meet other like minded people out there!

Let me know if anyone in the area is interested!

Very exciting to see! Question for you, how did you budget your rehab costs when looking at the deal?  It looks like a pretty heavy rehab.  Interested to hear more!

Big thing is keeping your debt to income ratio at a reasonable level.  Banks will often turn you down if you're over 35%.

To calculate, take your total monthly/annual debt payments (including a potential mortgage) and divide by you total monthly/annual income (pre tax).  If this number is above 35%, you'll have a tough time getting through underwriting.

I too just graduated with a bunch of debt, albeit less, but I understand the situation.  I'm funneling everything I can towards it.  Once my D/I ratio was looking better, I used spare cash to buy a cash flowing property that I'm house hacking.  The extra money every month is going towards *you guessed it* my student loans.

It's smart to increase your income to, rather than be passive or active, as more income (that you report to the IRS) will help your ratio AND help pay down that debt in the meantime!

Looking to hear strategies of people buying in mid-tier cities where rental rates are high, however real estate pricing is even higher, meaning the mortgage payments eat up a lot of the cash flow.  I'm an Atlanta native and have a 5/3 single family property just inside the perimeter I was able to score for 250K in decent shape, only minor repairs needed.  My basic strategy is to buy these houses using primary residence financing and rent out the bedrooms to offset all expenses, even swing a profit (house hacking), until a year passes, move to the next house and repeat, keeping the other houses as rentals.

However, if you move more towards downtown, prices for larger single family homes with a decent number of bed/bathrooms (4/3 is my target or higher) are very expensive and easily hit 500K to over a million.  With those prices, my strategy can't be sustainable downtown, and with appreciating markets, I'm not sure it will remain feasible on the edges of the perimeter either.

What are some strategies for building up a cash-flowing portfolio in markets where housing prices are too high to purchase and rent out?

As a side note, I'm considering looking at multifamily (up to quads to keep financing non-commercial) which may fetch higher rents, however, these prices are quite high as well.