I’ve considered it, but my wife wants the kids and her to be completely separate from my real estate investments. We recently built our home next to our good friends and it’s an awesome situation. For now, I just purchased my first single family home to rehab and rent, and I’m in the process of securing financing on 2 more. 20% down sucks though!
Originally posted by @Brady Melugin :
If you had a single family home and decided to live in one room and rent out the other rooms, how would you come up with fair pricing for each room?
I used to rent a room from a recently divorced guy who didn’t wanna give up his pole building, 40 pc gym, pool, hot tub, and classic cars. I had full access to the gym and pool, and paid $500/mo for the room. I think it was cheap, and most room rental situations in a nice home with amenities should be close to a small apartment price.
Hi @Craig Curelop ! Thanks for doing this. I'm currently house hacking and looking to do my second house hack here soon.
For those not looking to rent to family or friends to reduce any conflicts that might arise from a close relationship being tainted by business gone awry.
Do you have any tips on finding roommates? Besides the usual university boards/craiglist/Facebook.
Thanks in advance!
@Sean Tippens - The audible version comes out on October 17th!
@Jeremy Corporan - You need to make sure the house cash flows both by the room and outright. You could always continue to rent it by the room when you move out. That is what I do.
@James Murphey- Does your investment include the down payment? Or is that the amount of the actual property? If it's the amount of the actual property then 10%-12% seems pretty good. That is an interesting way to go about doing this.
@Brady Melugin - You just look at other rooms for rent in your area.
@Brian Brusich - why do an FHA loan? You can do 5% down conventional and save the FHA for a true multifamily? You should be able to rent out the rooms still. If you own the home and don't live there, you should have no problem renting it out as a full unit. Your jurisdiction might have occupancy limits in terms of the amount of non-related family members under one roof. But you'll have to check your own jurisdiction on that.
@Malik Eleby - My full story is in the book or on the podcast. But I funded it with a 3.5% down FHA loan. It was a duplex so I couldn't do the 5% down conventional that I typically like to do at the time.
@Kirill Lesnykh Sounds like you thought through this. If you need to live in a separate unit as your tenants, this sounds like a reasonable option. I would sugest maybe trying to find a place with more beds and renting out the top by the room? Perhaps instead of $1300/month for the whole thing, you can rent it out for $900/room? I don't know what rents are in your market, but rent by the room tends to be more lucrative. The other option is to try to find a small multifamily in your area? Or perhaps the trailer hack if you and your wife don't mind living in a decked out camper?
@VanAnthony Williams - I do have a lease specific for rent by the room, but it's about 85% the same as an original lease.
@Nick Mercurio - If you and your wife don't mind living with your tenants in a single family, I really like the 5% down conventional loan. However, if you need to get another duplex and want the 3.5% down again. I would definitely recommend refinancing. You need to make sure you have at least 20%-25% equity after you refinance. So I suspect you will need to have done a serious rehab if you want to do this successfully.
@David Freeman - in my market, PMI is about $200-$250 extra. By house hacking, I save over $1,700 per month from when I was renting including the cost of PMI. I'll let you do the math there as to whether the extra PMI is worth it.
@Hobie Day - For the washer/dryer. It is a short term rental right? If it's a short term, then you likely don't need a washer/dryer. If you are doing long term, I would say screen your tenants such that you would be okay with letting them use your laundry. For the Wifi, i would make sure it can be extended to the ADU. As for it being real close to the pool, maybe make a small fence or wall that can double as a seat.
@Didier Bizimungu - There is a whole chapter dedicated to this in the book. However, Roomster, Roomies, and Silvernest are other good rent by the room options. If you want to rent full units, Trulia, Zillow, and Hotpads is also good.
@Craig Curelop Thank you! I'll give those a look. Your book is next if I can get through my current list :)
Thank you for your input, i would be very interested in this. How do you find your tennants to room hack- craigslist? How do you get everyone on the same page comfortability wise within your tennants sharing bathroom and kitchen? Would i first have to see if room hacking is legal in my county/state? I might of found the perfect house for this scenario but i would need alot more details on this. If so is it okay if i PM you? Thanks again as i know you are very busy with your business.
Loving the book so far. Simple and straight to the point. New investor here so I need all the “hand holding” information I can get. Currently in the “Analysis” section of your book. Also looking forward to the webinar for this book. That is next month correct?
@Hung Tran - Yes there will be a Q&A for those who purchased the Ultimate Package. No specific webinars set just yet... but I am sure there will be some soon :)
Awesome. Yes, bought the ultimate package. Been reading digital since the physical copy hasn’t arrived yet.
Actually, I did have a question in mind as I was reading this book so far.
It’s hard for me and wife to currently house hack in the NYC market that we live in so far so I was wondering if I could kill two birds with one stone by:
A) help my younger sister find a place to live some place further north of NYC that’s cheaper (where she already currently resides)
B) have her be the person house hacking since my wife and I cannot and gain experience and maybe cash-flow through the process? Not sure logistically how it will all work out though.
Does this sound like a viable idea to you?
@Mindy Jensen ..... I’m patiently waiting for my copy in the mail . 😊
@Craig Curelop amazing podcast and story. I love how you broke down the comfort continuum. My wife and I are in the process as we speak looking for a duplex to start our first house hack and discussed our comfort continuum in detail and also hedonic adaptation. Thanks for your story!!
@Ben Leybovich @Craig Curelop Thanks, definitely helpful information! From my analysis, it makes more sense to do long-term rental and try to get college students or traveling RNs. I gathered data from Airbnb and estimated the average total price/booking and average number of bookings in my area to get the average total income I could receive on a month-to-month basis; however, that only came out to about half of what long-term rentals are going for. How do you guys look for the demand level of short-term rentals? I want to make sure I'm not being too conservative in my estimation.
It was a great podcast and I'm excited to have the book on my shelf. With house hacking, the loan is typically a 3% down loan. How do I get around getting rejected for the loan because of no working history? I'm set to graduate college in a year and a half and I think this is the dilemma I would be hit with.
I am 52 years old and came across bigger pockets 2 days ago. I have spent 10’s of thousands on classes for real estate and to date have had 2 humbling flip experiences. I own a contracting company and trying to ease out over the next several years. I am interested in using the house hacking Strategy to build momentum. Would love to interact with the community on this
Very exciting! This may be just the path for me.
I'm a newbie, haven't yet purchased my first property but I'm looking. Hoping to get a 2 bed and 2 bath (condo or house) to start with. Should I purchase something bigger or stay within the range of price I can afford if in any case I dont find someone to rent it for any time being?
Im assuming the lender will only look at my (single) income? Wont they take into account that I'll be renting out the other room/s?
Thanks for your guidance. It could really help me in making a decision on what to buy for my first house hack. I dont want to be too safe or too risky.
@Hung Tran - NYC is tough. You have to get really creative.... like the guy who started the co-living space in SF. Those expensive markets are tough. I would weigh your options of potentially moving outside of the city. You can definitely have your sister house hack, but she won't be able to do it through you. You can't take a loan out and have her house hack for example. If you take the loan out, it has to be YOUR primary residence.
@Hobie Day - I will just look at other AirBnbs around me to see what price they are at and how often they are booked. If most of their days are booked, then I will feel confident in their numbers.
@Timothy Douglas - If you have a W2 job out of school, they will typically make an exception. You have to talk to your lender and show them same pay stubs.
@Sweeney Mae Montinola - If you have a lease signed then they will likely count it. But for your first one, probably not. You will need to be able to afford it on yourself. I always recommend you make sure you can afford it yourself... but also make since you cash flow.
As I'm working a full-time job as a software sales professional, I am now seriously focusing on learning about Real Estate Investing with the intention to begin House Hacking at the beginning of 2020. This will give me enough time to fully pay off my student loans in 2019, save up for a down payment, learn as much as possible in my spare time, and then purchase a rental property with the goal of living for free. What do people recommend as a daily action/commitment to ensure this happens and set myself up for the greatest success?
Just got it on Audible! Can't wait to dive into it!
What is h I use hacking g?
Just moved in to our first house hack. Had to hurry and get it
rehabbed and get the other side of the duplex rented before our second
baby came. Just started to finally get settled in a bit. I'll admit its a bit of a difference since we used to live in the country with no neighbors.
@Craig Curelop I have a question. There is a 1,050 sq ft. shop on the property I want to rent out which is one of the big reasons I bought the property. Its insulated, power is sub-metered, concrete floor, automatic garage door. How would I best utilize that space? I have posted it as a working shop and as a place for storage and had gotten quite a few inquiries but most people weren't a good fit or just never followed up. The shop is on the side of the duplex I have renters on so it will be pretty close quarters for having a tenant in the shop too.
This was the podcast episode that pushed me and my wife over the edge to commit to REI! Thank you!
I am currently looking for my first house hack in the Phoenix area, and I just listened to the first couple of chapters of the book through Audible. I have been interested in purchasing a 4plex, however I would like to purchase/build a new property. My problem is I would need to count some rent as income to qualify for a loan. Anyone know a way to have a property built for me and yet still use future rent to qualify for a loan?
Updated about 1 month ago
Craig, I suppose my question should have been directed to you.
Love it! I'm currently doing this! Great way to reduce living expenses and take advantage of low down financing!
House hacking is the way of the future!
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