Fork in the Road: House-Hack or Long Distance Investment

Real Estate Agent · Skagit Valley, WA · Member since 2021 · 257 posts · 283 votes

- 32 years-old is a great age to learn about investing..... younger than many who have succeeded wildly.

- a <200K turnkey duplex that will cash flow immediately at $400-$500 a month while being managed by a good friend - wow, doesn't sound like too tough a decision. This would not be a fork in the road for me.... (assuming you have the funds to move on this....)

- sure, you want to get out of renting....but there's nothing wrong with traveling a step at a time. With smart decisions, the pace will pick up, believe me.

5 Reply

Nathan Grabau

Realtor · Longmont, CO · Member since 2021 · 577 posts · 631 votes

4y

I have spent some time researching other major areas in Ohio, and it seems like everywhere but Columbus is cheap for a reason. If you buy the duplex for 200k as an investment property, you will have to put at least 40k down. With that 40k on an FHA loan, you can get a 3.5% down loan and buy a 1-4 unit property with a budget that is much larger than that.

Outside of Ames, Des Moines, and Columbus, I have yet to find a major population area that has reasonable cashflow but is not having a decreasing population. Columbus is going to be more expensive than the rest of Ohio, your down payment will be about a sixth of what an investment property is if you buy a house hack. It could potentially leave enough cash on hand to do both.

3 Reply

Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

4y

Quote from @Mack K Everly:

Hey, everyone. I'm new to the world of real estate investment and am still in the education phase of my journey. Definitely been frustrating to realize at the age of 32 that I've been taught all the wrong things about how to make my money work for me. Anyways, everyday I try to look at the multi-family listings in my area mostly for practice in trying to evaluate properties, but also for the off-chance that I find a good opportunity. I am at a bit of a fork in the road though and I'm curious on others' thoughts/advice. Basically, I'm trying to decide between continuing my search for a house-hack close to home here in Columbus (feels impossible right now) or doing a long(ish) distance investment in another area (still in-state) where there are actually duplexes that would cashflow right away.

I've got a good friend who works as a realtor in an area about an hour away from me. He let me know about a duplex he's got listed for <$200k (unheard of the Columbus areas I want) that is pretty much turnkey. On top of that, he's offered to be my property manager while I stay in Columbus. I'm still figuring out how to analyze deals, but from what I can tell the property would cashflow about $400-$500 right off the bat once both sides are rented out. The only real downside I can see right now is that I would still be renting my current place, so I still wouldn't be "living for free"... but like I said, a "living for free" house-hack is feeling pretty impossible in Columbus right now. It would at least pay for about 40% of my current rent. Honestly, even if I don't pull the trigger on this one, a glance at the market in that area shows MUCH more affordable multi-family investment opportunities... so I will come back to this fork in the road if I don't figure out how to deal with it now.

Has anyone else wrestled with this dilemma? How did you solve it? What pushed you over the edge on one side or the other?

I'm very much stuck in "analysis paralysis" right now despite warnings from BiggerPockets and Rich Dad books and podcasts…

*Note: Moving to this duplex to house-hack it is unfortunately not possible due to my W-2 job. Otherwise, I would gladly just move to the property and house-hack it as even that would give me some small cashflow.*

Thanks in advance for your collective thoughts!

I would house hack in Columbus, Ohio first

[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals

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Joshua JanusBusiness Member

Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes

4y

Quote from @Mack K Everly:

Hey, everyone. I'm new to the world of real estate investment and am still in the education phase of my journey. Definitely been frustrating to realize at the age of 32 that I've been taught all the wrong things about how to make my money work for me. Anyways, everyday I try to look at the multi-family listings in my area mostly for practice in trying to evaluate properties, but also for the off-chance that I find a good opportunity. I am at a bit of a fork in the road though and I'm curious on others' thoughts/advice. Basically, I'm trying to decide between continuing my search for a house-hack close to home here in Columbus (feels impossible right now) or doing a long(ish) distance investment in another area (still in-state) where there are actually duplexes that would cashflow right away.

I've got a good friend who works as a realtor in an area about an hour away from me. He let me know about a duplex he's got listed for <$200k (unheard of the Columbus areas I want) that is pretty much turnkey. On top of that, he's offered to be my property manager while I stay in Columbus. I'm still figuring out how to analyze deals, but from what I can tell the property would cashflow about $400-$500 right off the bat once both sides are rented out. The only real downside I can see right now is that I would still be renting my current place, so I still wouldn't be "living for free"... but like I said, a "living for free" house-hack is feeling pretty impossible in Columbus right now. It would at least pay for about 40% of my current rent. Honestly, even if I don't pull the trigger on this one, a glance at the market in that area shows MUCH more affordable multi-family investment opportunities... so I will come back to this fork in the road if I don't figure out how to deal with it now.

Has anyone else wrestled with this dilemma? How did you solve it? What pushed you over the edge on one side or the other?

I'm very much stuck in "analysis paralysis" right now despite warnings from BiggerPockets and Rich Dad books and podcasts…

*Note: Moving to this duplex to house-hack it is unfortunately not possible due to my W-2 job. Otherwise, I would gladly just move to the property and house-hack it as even that would give me some small cashflow.*

Thanks in advance for your collective thoughts!

House hack in Columbus. Areas like Old Town East, Southern Orchards, Merion Village, Hungarian Village, Franklin Park and others are great areas to get started!

[email protected]614-502-5316 Podcast Guest on Show From DoorDasher to $1.5 MILLION in Real Estate (All at 22 Years Old!)

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Austin McClainBusiness Member

Real Estate Agent · OH · Member since 2021 · 348 posts · 602 votes

4y

Are you a first-time homebuyer? There are great mortgage products you can use if this is your first home to get a low down payment mortgage if you owner occupy it. Products like the CHAMP loan could change the numbers on the house hack option.

[email protected]614-710-4827

0 Reply

Ali Boone

Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes

4y

I would focus less on what you "should" do, which I'm assuming is just because you keep hearing people go on about how smart househacking is. It can be, sure, but it isn't the only option and definitely shouldn't deter you from making a smart investment. Sometimes it can cost more to 'live for free', in more ways than just with money. If that duplex will cash flow $400-500/month, I'd say go for it (depending on what the purchase price of the property is, to know how good of a return that is). With interest rates are where they are right now, those cash flow numbers have gotten stupidly hard to hit. Get that property, learn the ropes, househack later when it makes more sense. Don't get yourself in a pickle because you think you need to hack. If it works to do it, great, but if not, don't miss out on good deals in the meantime.

1 Reply

Mack K Everly

OP

New to Real Estate · Rockville, MD · Member since 2022 · 6 posts · 2 votes

4y

Quote from @Remington Lyman:

I would house hack in Columbus, Ohio first

Thanks for the feedback, Remington! Could you expand on that a little for me as to why you would so strongly pursue a house-hack in a market like Columbus (which feels more inaccessible to me everyday) versus acquiring a cashflowing investment rental property elsewhere? I want to see how everyone is thinking about these sorts of things since I'm new to the process.

0 Reply

Mack K Everly

OP

New to Real Estate · Rockville, MD · Member since 2022 · 6 posts · 2 votes

4y

Quote from @Joshua Janus:

House hack in Columbus. Areas like Old Town East, Southern Orchards, Merion Village, Hungarian Village, Franklin Park and others are great areas to get started!

Thanks, Joshua! These are all the neighborhoods I'm looking in already and they seem completely inaccessible. Are you having better luck? Maybe I just don't know how to analyze a deal properly yet, but I can't seem to make the numbers work on anything I find... admittedly, I'm confined to MLS searches right now though, because I don't have an REI network yet... so off-market deals are unfortunately just not an option for me yet. Hoping to get plugged into the community soon!

0 Reply

Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

4y

Quote from @Mack K Everly:

Quote from @Remington Lyman:

I would house hack in Columbus, Ohio first

Thanks for the feedback, Remington! Could you expand on that a little for me as to why you would so strongly pursue a house-hack in a market like Columbus (which feels more inaccessible to me everyday) versus acquiring a cashflowing investment rental property elsewhere? I want to see how everyone is thinking about these sorts of things since I'm new to the process.

You do not have to put as much down so you have better cash on cash return.

[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals

Reafco512 Reviews

Website View Page

0 Reply

Brandon GoldsmithBusiness Member

Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes

4y

There are still plenty of areas to house hack in Columbus for an affordable price. Just use a low down payment loan to get into one at a cheaper out of pocket. @Mack K Everly

[email protected]614-963-3340

2 Reply

Nicholas L.Pro Member

Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes

4y

@Mack K Everly a few thoughts:

-32 - you're fine. When I was 32, I hadn't discovered BP yet, and I foolishly sold a rental property I had bought in 2011 at a rock bottom price that was a killer, killer deal. Since then, it's taken me 6 years to buy 4 rentals. I'm trying to improve with each that I buy.

-wanting to make a smart decision isn't analysis paralysis. That's just a fun term that rhymes. Being patient and making a smart decision is better than rushing. Everyone is convinced that if they haven't bought something yet, it's "paralysis." Nope. Buying real estate is a big deal, and transaction / closing / financing costs make the transaction itself expensive. If you haven't yet look at a full loan work up from a lender and you'll see what I mean.

-post the detailed numbers on the duplex here so we can take a look and see if it truly cash flows that much. You said it's "listed" which means it's on the MLS, which means I have a hard time believing it's a slam dunk deal if it hasn't sold yet. But who knows.

-you said you're analyzing properties in Columbus, but are you working with a realtor? How many have you seen? How many offers have you made?

1 Reply

Paul Camuto

Real Estate Coach · Robbinsville, NJ · Member since 2017 · 185 posts · 99 votes

4y

Quote from @Mack K Everly:

Hey, everyone. I'm new to the world of real estate investment and am still in the education phase of my journey. Definitely been frustrating to realize at the age of 32 that I've been taught all the wrong things about how to make my money work for me. Anyways, everyday I try to look at the multi-family listings in my area mostly for practice in trying to evaluate properties, but also for the off-chance that I find a good opportunity. I am at a bit of a fork in the road though and I'm curious on others' thoughts/advice. Basically, I'm trying to decide between continuing my search for a house-hack close to home here in Columbus (feels impossible right now) or doing a long(ish) distance investment in another area (still in-state) where there are actually duplexes that would cashflow right away.

I've got a good friend who works as a realtor in an area about an hour away from me. He let me know about a duplex he's got listed for <$200k (unheard of the Columbus areas I want) that is pretty much turnkey. On top of that, he's offered to be my property manager while I stay in Columbus. I'm still figuring out how to analyze deals, but from what I can tell the property would cashflow about $400-$500 right off the bat once both sides are rented out. The only real downside I can see right now is that I would still be renting my current place, so I still wouldn't be "living for free"... but like I said, a "living for free" house-hack is feeling pretty impossible in Columbus right now. It would at least pay for about 40% of my current rent. Honestly, even if I don't pull the trigger on this one, a glance at the market in that area shows MUCH more affordable multi-family investment opportunities... so I will come back to this fork in the road if I don't figure out how to deal with it now.

Has anyone else wrestled with this dilemma? How did you solve it? What pushed you over the edge on one side or the other?

I'm very much stuck in "analysis paralysis" right now despite warnings from BiggerPockets and Rich Dad books and podcasts…

*Note: Moving to this duplex to house-hack it is unfortunately not possible due to my W-2 job. Otherwise, I would gladly just move to the property and house-hack it as even that would give me some small cashflow.*

Thanks in advance for your collective thoughts!

Stop looking at multi-families. Look at a condo or single family. There is no reason to "house hack". Just buy a property that you can cash flow day 1. Set yourself up for success so you can just get started. All of the other stuff you are reading is just noise at this point, especially for those looking to get started.

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Fork in the Road: House-Hack or Long Distance Investment

Fork in the Road: House-Hack or Long Distance Investment

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