House Hacking Research - Tell Me Your Story!

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House Hacking Research - Tell Me Your Story!

Craig CurelopBusiness Member
Real Estate Agent · Post Falls, ID · Member since 2016 · 1k+ posts · 1k+ votes

Hey everyone! 

I am doing research for a house hacking project and need some stories of fellow house hackers. Could you please reply to this thread with your house hacking story?

Please include your location, strategy (rent by room, Airbnb, duplex/triplex, etc.), and numbers associated with the deal. 

Thanks!

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Joe Sadusky
Rental Property Investor · Levittown, PA · Member since 2016 · 109 posts · 97 votes
7y

My first house hack was done accidentally. 

I was required to move from PA to NJ for a new job right out of college. After looking a places to rent, I quickly realized that renting a 2 bedroom apartment would be more expensive then a mortgage on a 4 bedroom house in the same area!

My first property was in Edgewater Park NJ, technically South Jersey. Its a large 2300 SF twin house. Bought for $30k cash (borrowed money from family), put about $20k into it (got a high interest personal loan)- all in for $50k... apprasied for $140k and I pulled out $115k. 

After paying back the $30k I borrowed and the $20k private loan, I had $65,000 for another deal.

With the money I received my the cash refi, I was able to purchase the attached twin house that came up for sale. Bought with the $65,000, and also put $20k into this one.  $85k all in.  appraised for $150k, and did a refi for $115,000 again leaving some more $ back in my pocket. 

I lived in the first house while fixing it up, and it was super convenient to fix up my first rental after my 9-5 job (since all I had to do was walk next door). 

After completing the rental, I advertised, screened, and found great tenants for the property.  

After paying off the mortgage, I was able to cash flow over $500/month.  

Since I saw such great returns, I decided to move out and rent the side that I was living in as well. 

Both properties currently bring me in over $1,100 a month in passive cash flow. 

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  • Joe Sadusky
    Rental Property Investor · Levittown, PA · Member since 2016 · 109 posts · 97 votes
    7y

    My first house hack was done accidentally. 

    I was required to move from PA to NJ for a new job right out of college. After looking a places to rent, I quickly realized that renting a 2 bedroom apartment would be more expensive then a mortgage on a 4 bedroom house in the same area!

    My first property was in Edgewater Park NJ, technically South Jersey. Its a large 2300 SF twin house. Bought for $30k cash (borrowed money from family), put about $20k into it (got a high interest personal loan)- all in for $50k... apprasied for $140k and I pulled out $115k. 

    After paying back the $30k I borrowed and the $20k private loan, I had $65,000 for another deal.

    With the money I received my the cash refi, I was able to purchase the attached twin house that came up for sale. Bought with the $65,000, and also put $20k into this one.  $85k all in.  appraised for $150k, and did a refi for $115,000 again leaving some more $ back in my pocket. 

    I lived in the first house while fixing it up, and it was super convenient to fix up my first rental after my 9-5 job (since all I had to do was walk next door). 

    After completing the rental, I advertised, screened, and found great tenants for the property.  

    After paying off the mortgage, I was able to cash flow over $500/month.  

    Since I saw such great returns, I decided to move out and rent the side that I was living in as well. 

    Both properties currently bring me in over $1,100 a month in passive cash flow. 

    26Reply
  • Chris Babcock
    Member since 2018 · 63 posts · 52 votes
    7y

    At the time I did it I didn't know it was called house hacking, I thought it was just called figuring out how to pay the mortgage :-)
    I bought a nice cape in SE CT during the GFC while working for a major employer in that neck of the woods. I was fresh out of college and started the new job with a big cohort of entry levels like me. Developed friendships during the first year of renting down there and then came the 8k tax refund to buy a house plus 3% FHA financing. I found a nice 3bd 2ba 1950's Cape and purchased from the original owners for $190k, it needed cosmetic updates and some basement water issues fixed but it had solid bones and character that you don't see anymore. Worked out to a monthly mortgage of ~$1400 with taxes and PMI baked in which was $150 less than I had been paying (splitting with roomate) in rent.

    My roommate came and got another friend/coworker to jump in and rent rooms for $400/mo + split utilities. So I was ultimately paying $600/mo for mortgage myself and they were getting a full house to live in for way less than they could get a 1bd rental in the area.

    Important lessons I learned from my first 'deal':

    - I now have invaluable knowledge of how to fix just about everything that can go wrong in a house. I also now know how to refinish floors, paint, hang gutters, etc. I don't do most of this stuff anymore because I now know what my time is worth but it really helps me double check contractor quotes and comes in handy in emergencies. It also really solidified a mentality in my head around problem solving in any situation (What to do when you come home from work, find a pit in your backyard where your septic tank used to be and now the toilets don't flush, oh and it's Friday night, oh and you have no CapEx money).

    - Don't always trust your realtor (unless you know them really well) nothing against realtors, just remember that they have significant skin in the pricing game. I low balled the offer and my realtor discouraged me from offering because she thought they wouldn't accept and would be offended. I had been looking for 6+ months and was getting frustrated and told the realtor to just do it. They accepted without countering. When I went to sell, I used same realtor, came in with (what I now know) were bad (unrealistic) comps that put appreciation in the 30% ballpark over 3 years...house sat on the market for 6 months till I got a new realtor. New realtor came in, comped reasonably and house sold in 3 days. Fool me once, shame on you fool me twice shame on me.

    - Things were different 'back then', inventory, cheap money, motivated sellers. It's interesting to have been in the market at that time and contrast it to now only one decade later. Things change

    - I only held the house for 3 years then jobs forced me to move so I didn't make a bundle of $$ on it but learning experiences were invaluable

    6Reply
  • Jian G.
    Rental Property Investor · San Diego, CA · Member since 2019 · 102 posts · 43 votes
    7y
    Originally posted by @Craig Curelop:

    Hey everyone! 

    I am doing research for a house hacking project and need some stories of fellow house hackers. Could you please reply to this thread with your house hacking story?

    Please include your location, strategy (rent by room, Airbnb, duplex/triplex, etc.), and numbers associated with the deal. 

    Thanks!

    I haven't been active in REI in the last 10 years not until the last few month. We buy one house every year or one house every two years. Recently we are trying to accelerate our financial freedom goal so we have been very active on buying properties. At the end of next month, we will have added 9 more doors in a 3 month period and an increase of $6500/month in cash flow. Additionally, I have been living in a 4 bedroom house for over a year with 3 vacant rooms. our house can rent out for $3500 a month and I am renting out the other 3 rooms now which will give another $2175 a month to invest more aggressively in apartments. At the end of this year our goal is to add a total of 30 doors in California or 100 doors if we start doing out of states.

    7Reply
  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    7y

    Duplex in Philadelphia (Fishtown) purchased in 2010 for 200k.

    I lived in the crummy unit and rented the upstairs for $950. PITI was about $1100.

    Lived there for 4 years and renovated my unit throughout that time. 

    Now I rent both units out for $1150 each. 

    Last year I refi'd out to capture some equity. Pulled out about 70k. New PITI is about $1500/month and rents are a combined $2300.

    The property has done well. It is in a very desirable location. But I have had some major Capex to deal with in the past 3 years: new brick front facade, 2 new gas furnaces, new water service line, and plenty of other smaller maintenance issues. Over half of that 70k I pulled out has gone to pay for those items. The other half went towards another duplex I just finished renovating.

    1Reply
  • Ashley Massis Class
    Flipper/Rehabber · Charlotte, NC · Member since 2019 · 20 posts · 24 votes
    7y

    Call be a bit of a newbie or outdated with the terms, but I recently just learned of the house hacking term and didn't know I've been doing it!

    I bought a home in a growing area of Charlotte, NC after realizing that my rent of $1295 for a luxury 1 bedroom 1 bath would be more expensive than an $1000 mortgage.


    I had just moved from Upstate NY to Charlotte, NC so relied on the help of a realtor to help me find a growing neighborhood that would allow a single gal to be safe. Since I had moved down the coast for a contracting job, I had a great tax refund that year which assisted my savings for a down payment. I purchased the home for 170k. Monthly mortgage on 1600 sq foot 3/2 was $1000. I had a live in boyfriend who (thankfully) I decided not to put on the mortgage and he paid me $500 a month plus splitting utilities. The area was very up and coming and we had one attempted robbery, but with a dog and another person living in the home I always felt safe.

    The first month we purchased the home the house was hit by lightening (blew out all of the electricity) and the water heater went. I had to add a fence for my dog, so first month killed me with 6k in damages/updates.

    Because of that first month, we decided to rent out a room for $400 a month as a sublet. They stayed for 4 months. Boyfriend stayed for 8 months, and then it was just me with the mortgage. But again, I was used to paying $1295 in the southend area of Charlotte so I had been saving my half of the mortgage that others were paying during the whole time.

    I stayed in that house for another year, when the market exploded. I renovated the kitchen, opened a wall, and improved the master bath with a skylight. During that year I met my would be husband, so we decided as the market exploded to buy another fixer upper and do what I did with my current home, which was sell this one and live in the new one for 2 years to avoid capital gain. I sold the home for 305k, put 40k into renovations and 170k as initial purchase price, and had lived in it so I didn't pay rent...so was happy with my gains.

    Important lessons I learned from my first house-hack

    -Everything that can go wrong will go wrong. Make sure you keep 5% for emergencies. Losing my electric and water heater within the first month made me VERY resourceful

    -Don't always trust the home inspection. They can't open the walls to see if all the wiring is up to  code. You can HOPE that people believe in karma and they won't just put new outlets on old wiring, but you'd be surprised at what is concealed. Always have a backup plan

    18Reply
  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    7y

    I did it a little different from Brandon and a little different from Scott. And I sure as all get-up didn't rent out a couch in my living room like some people we know. But, I think we can al agree, my way is better :)

    4Reply
  • Andrew Beaver
    Malden, MA · Member since 2016 · 112 posts · 63 votes
    7y

    I currently rent and rent out a bedroom through Airbnb in MA.  Starting doing this in Framingham, MA where I was seeing around 1100 a month but averaged out over the year it was a little less.  Rent was only $1550.  Transitioned to Dorchester, MA where rent is 2k and I'm bringing in 1200 a month with summer months looking closer to 2200.  

    2Reply
  • Corey RisslerPro Member
    Rental Property Investor · Casper, WY · Member since 2017 · 8 posts · 10 votes
    7y

    I live in Casper, WY. I discovered house hacking through BP actually. I was formerly living in way too much house for my needs and wanting to expand my RE portfolio, so I decided to try out house hacking. I got with my good friend who also is a broker and we found a few 4plexes. I thought this would be ideal as not only could I live for free but I could generate income while living in the units. Long story short I wound up renting out my previous home and refinancing some of the equity out of it for a down payment on the 4plex.

    I wound up making a deal on a great property and purchased it about 20k back of appraised value and used that equity to do some renovations to the unit I was going to move into. I now live in one unit. Purchased the home for 315k and acquired a 30 year fixed note on the home and had all other units rented out within a month. Now instead of having a 3k mortgage every month I get paid $650 a month for living in my 4plex and have since used that move to purchase a second 4plex which also cashflows about 850 per month.

    6Reply
  • Kevin Phu
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    7y

    I purchased a 4BR SFR in Southern California in 2017 with a 0% VA Loan with a monthly PITI of $2400. I live in the master bedroom and rent out the other three rooms for a total of $2300. I cover the utilities, internet, and yard maintenance which costs me a total of about $360/month. So total out of pocket per month is around $460 compared to when I was paying $1435/month in rent + ~$100/month in utilities for a 1BR apt.

    I didn't expect to be cash flowing on this property since I was putting 0% down and a MFR has been hard to find. My goal was to significantly reduce my monthly expenses while adding to my net worth instead of paying rent to add to someone else's. My goal is to continue saving up money and eventually refi into a conventional loan so I can reuse my VA loan to hopefully purchase an MFR this time around.

    4Reply
  • Jon Tom
    Member since 2018 · 1 post · 3 votes
    7y

    My fiance and I bought a 3/2 SFH in Denver 5 months ago for $400k with 10% down.

    This house is located within a 7 min walk to the rail line and 10 min drive to downtown. We built an addition conforming bedroom in the basement and currently two bedrooms are rented at $900 and $850 with one bedroom still looking to be filled.

    PITI (with PMI) is about $2100.

    We pay all utilities and wifi.

    Before buying this home, we lived in an apartment that charged about $1100 a month for a 1bd/1ba with utilities. Now we pay about $600 (estimating about $200/mo for utilities) with a vacant room that is listed at $850. 

    Our strategy is to house hack this until we decide to move, then we can continue renting out each room or rent to one family for less stress.

    Lessons Learned: 

    1) Put in some sweat equity on your house hack remodel because I've learned a lot through the process. This has helped me understand what things should cost and how much labor goes into projects for when I need to call a contractor for work in the future. I also learned that plumbing is a pain in the butt. 

    2) Buy at a price with room to add value and refinance to pull out most of the down payment / rehab costs. This house wasn't a smoking great deal so most of our cash will be stuck in this property for a while. 

    3) PMI costs us $100 a month instead of $40k up front.

    3Reply
  • Jeff WhiteBusiness Member
    Realtor · Denver, CO · Member since 2016 · 278 posts · 371 votes
    7y

    @Craig Curelop

    I lived in a world of not knowing what house hacking was until October 2016 from a book that totally changed my outlook on real estate investing by @Mark Ferguson, and he mentioned house hacking a duplex (living in one unit and renting the other) and living for low cost or for free, and it changed from mind and life forever.

    Thus, as I was curious for more information, that lead me to do a google search and find the holy grail of real estate: BiggerPockets, @Brandon Turner, @Scott Trench, and Mr. Curelop, and all the posts, information, etc...totally changed my perspective even more to a new level.  The light bulb turned on!

    In late summer of 2017, I decided to sell my condo, buy a 4 unit in Denver, and start the journey of house hacking my way to financial freedom.  I rented out the three units and lived in one unit myself.  During the course of the summer, I did Airbnb one bedroom for a period of time, so that did help with the cash flow during those months.   The final numbers on the four unit for 2018:

    Purchase Price: $630,000 (8/11/2017)

        Actual Gross Rents: $56,000

        Actual Mortgage: ($42,000)

        Actual Utilities:  ($3,600)

        Actual Maintenance/Vacancy/Capex:  ($3,600)

        2018 Net Cash Flow:  $6,800

    • For 2019, I should achieve about $8,000 in Net Cash Flow as a fully stabilized property (still have some under-market rents in two units, but those tenants have been on the property for 15 years and are great tenants).    

    For my second house hack, I moved out of the 4 unit, and I bought a single family with a mother-in-law apartment in October 2018 a little north of Denver in a suburb named Northglenn.  I'm using a couple of strategies.  Since it is literally divided like a up/down duplex with its separate entrance, I've rented out the top unit (3/2 unit) to a family for $1,875/month.  

    The mother-in-law also has a basement (that's where I'm living with my girlfriend).  I'm renting the other rooms in the mother-in-law portion for ~$630/room for three rooms as well.  Since I needed to add an egress window to the basement to make it legal and some other improvements, it took a few months before stabilization in Feb 2019.  Here are the projections:

    Purchase Price: $375,000 (10/17/2018)

        2019 Projected Gross Rents: $43,000

        2019 Mortgage: ($28,000)

        2019 Projected Utilities: ($3,300)

        Projected Maintenance/Vacancy/Capex: ($2,500)

        2019 Projected Net Cash Flow: $9,200

    • From the lessons I learned on the first house hack, I was able to find a better deal on the second one.   What's incredible is that not only am I living for free, but I'm finding a way to make money while living there.  It is absolutely amazing strategy for anyone, and I plan to continue to keep doing this until I achieve financial freedom.  I don't see how anyone doesn't want to do house hacking if you don't mind moving even with a significant other.    
    6Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    7y

    @Craig Curelop I’m in Minneapolis. Bought a duplex for $182,000. Rented one unit for $1200, a room in mine for $450 and a room in my unit for $500 a month with Airbnb. I fixed up both units for roughly $10k and sold 3 years later for $327,000.

    [email protected]512-888-9122
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    3Reply
  • Jake Simmens
    Huxley, IA · Member since 2016 · 9 posts · 9 votes
    7y

    @Craig Curelop While living in Bloomington, MN (suburb of Minneapolis) I managed an apartment complex and lived on site in the penthouse.  I got the unit at a discounted rate of about $900 per month.  It was a 3 bedroom 3 bath, so i rented out two rooms each at $500 per month plus utilities.

    In the end, I was living for free with the $1000 per month covering my rent amount along with my portion of the utilities.  It was a sweet deal for 3 years and then I met my wife and kicked out the roommates.

    4Reply
  • Matt Millard
    Lewisville, TX · Member since 2015 · 344 posts · 264 votes
    7y

    I started young & bought a 4/2 slightly used class A- home in Norman, OK for $140k after my freshmen year at OU. I got 2-4 roommates on & off over the 4 years I lived there & made good money & cash flow. My payment was $550 & all in for about $800 & made $300-$600 in monthly cash flow by charging $350-$400 per room. It was great experience as I learned to improve the property & keep up with maintenance. Luckily I had a family member to partner with on the deal & a ROTH Ira I could cash out & some savings from my lawn service & high school jobs.

    I also had a Roomate who was very handy & did some contracting on the side. We did major improvements & this helped me attract top tenants & get top dollar rents & eventually acquire more properties. I eventually sold out to my brother & became a syndication & partnership investor in over half a dozen deals across multiple states. I really like doing owner finance & mobile home parks these days.

    My most stressful experiences involved picking an occasional poor roomate, getting a call while traveling about a water leak that was my responsibility not the city’s or having to move out & rent the place to law students & other long term tenants & manage all that without professional property management. There were a few other maintenance hassles along the way some I remember some I don’t. All told I owned the house for 11 & a half years.

    2Reply
  • Isaiah Williams
    Rental Property Investor · Columbus, OH · Member since 2018 · 97 posts · 66 votes
    7y

    @Craig Curelop

    My first (and still currently in) househack was done completely by accident.

    At the time, I was 19, young, ambitious, and (you guessed it!) In love. I had a fiancé whom was pregnant with our first child, and we were living in an apartment talking about buying a house.

    After a few months of poking our heads through the MLS, my fiancé's mother ends up in financial trouble and is about to be foreclosed on. I didn't really plug in any actual numbers (otherwise I would have probably never have bought it!), but after a quick bit of research found out about FHA loans, 3.5% down payments, etc. I didn't really like the house. It was a fixer - upper In a TERRIBLE neighborhood, but I figured of course, "buy the house, get In good with the future mother in law, save the future wife's childhood home, and be a "hero". What could go wrong? (Riiiiiggghhhhtttt 🤦🏽)

    Ended up buying the house for full market value (which BTW was only $65,000 for a 3 bedroom, 2 bath house in Columbus, Ohio area) with an FHA loan. I think I wrote a check for only $2000, and after a month they actually sent me back a small $250 check because I had actually over paid!

    Like I said, I never actually looked at the numbers, I just knew that the mortgage would only be about $330 (plus escrow about $500 a month) and I would save a lot versus the $700 a month we were paying for our apartment.

    Anyway, fast forward a few months and of course, things don't work out between me and my now ex fiancé. We break up, she moves out with my son, and I am left by myself in this big 3 bedroom house.

    My best friend by pure coincidence decides he is "grown" (remember I'm only 19-20 years old) and is ready to move out. I offered for him to stay in one of my spare bedrooms for a small monthly rent and he accepted. He ended up paying $200 a month for a room, and after a month he is another friend whom also wants to

    Move out of his parents house. I didn't know the guy so I of course did a background check, but I ended up renting out the other spare bedroom for $275 a month.

    So now I'm currently living in this house still collecting $475 a month in rent, and mind you my TOTAL monthly mortgage plus escrow is only $500, AND I'm living here at the same time! My house actually has a fairly large basement that I can easily transfer half of into a LEGAL 4th bed room with its own personal full bath after I install a larger window for a fire escape. I'm about 2 months away from being able to finally get that installed, and once I do I can move my bedroom from.upstairs into the basement, leaving the upstairs bedroom available for another rental. I actually already have a good friend whom also wants to move in, and he already put down 2 months rent in advance for $350 a month and will be moving in once I have the new 4th bedroom finished, which would give me a total monthly rent income of $825 a month WHILE STILL LIVING THERE, and my mortgage is only $500 a month.

    I'm currently doing repairs and most of the renovation work myself. Last week I had the greatest pleasure of replacing a toilet when I accidentally dropped and broke the original trying to install a new vinyl floor in the bathroom, but Its still WAAYYYYY cheaper than if I had hired someone else to do it.

    No, I'm not an experienced home repair guy nor did I ever do handy man/ maintenance work in the past, but its surprising how easy so much of the work is that I had been previously paying THOUSANDS for someone else to do for me. I learned how to install carpet, vinyl, and tile floors, paint, do minor plumbing, hang drywall, etc., and I'm currently in the middle of learning how to replace a new sink in the kitchen as well as install a dishwasher! I learned how surprisingly easy it is to install updated light fixtures and I just today put in modern light dimmers in most of my bedrooms, hallway, and kitchen.

    YouTube is freaking amazing!

    Like I said, I didn't buy this house with the intentions of house hacking. That was an accident. If I was, I could have easily have bought an even better deal than I did for the house I am in, and probably would be charging my "tenants" more rent! Obviously, living with so many people has its own cons. (Example: I go through A LOT OF TOILET PAPER AND PAPER TOWELS every month, and the sink is ALWAYS full to the brim with dirty dishes), but I'm making it work! The biggest thing I would say, at least when it comes to house hacking and living with others, would be making sure you get along with the people you live with! I have my best friends living with me. Some people would say never mix family with business, but i personally could never let a complete stranger stay in the same home as I do.

    The next thing is BE 100% CLEAR on all the rules/ regulations that your "tenants" will be expected to follow, as well as what they expect out of you as the landlord. I have an actual month-to-month lease with both of my friends. They are both my best friends in the world, and the last thing I want is a measly $200-$300 a month rent get in between our friendship. Which is exactly why we have a lease agreement.

    Hopefully my own little story about my own journey helps. 🤗

    10Reply
  • Matthew DrouinPro Member
    Developer · Rochester, NY · Member since 2016 · 411 posts · 339 votes
    7y

    @Craig Curelop

    Hi! I started with owner occupying a four family is Rochester, NY. It was $165k in a great neighborhood. I only had $16k in cash at the time so I asked for $5k in seller concessions which helped me close the deal. They were all 1 bedroom apartments but I ended up taking the apartment which has access to the attic. There was an old servants quarters up there which I painted and removed wallpaper. I got a roommate because of this who paid me $450 a month. This allowed me to cover my PITI mortgage payment of $1800 a month as well as make a little bit of cash each month.

    After residing there a year I found a distressed four family down the street and bought that one but did the BRRR method. I refinanced it as an owner occupant and then rented out my old unit, allowing me to owner occupy and be cash flow positive on my next house.

    I had been saving so much money during this time that I was able to start buying non owner occupied investment properties and putting 20 percent down. The rest is history and now I am at 96 units of residential and commercial property. It only took 13 years! Haha

    Podcast Guest on Show The $150K “Stolen” Rental Property and How to Avoid a Real Estate Scam
    6Reply
  • Sam B.
    Rental Property Investor · Houston, TX · Member since 2013 · 476 posts · 294 votes
    7y

    This is a cross-post from another HH thread in the Investor Diary sub-forum but wanted to share.

    I did a budget DYI house hack a couple years ago that was both a miserable failure yet still a win all the same. Incredible learning experience, to say the least.

    Purchase price: $80k

    Rehab budget: $10k

    Actual spent: $24k

    All-in: $104k

    The story...

    This was a Hudhomestore.com home that was a super heavy cosmetic rehab (see before/after photos below). Starting the project in late March of 2017, I got it barely in livable condition by late May.

    I lucked out and was able to airbnb my apartment (was locked into a lease through 31-July) for the duration of the lease to a traveling nurse at $1800/mo (rent was $1k including all utilities) – win!

    I was roughing it (see my bedroom below) but I was pretty excited to be in the house and even more motivated to complete it.


    Screen Shot 2017-12-15 at 6.49.24 AM

    Screen Shot 2017-12-15 at 6.48.46 AM

    Screen Shot 2017-12-15 at 6.49.11 AM

    About a week after moving-in to my house project, the home was burglarized and I lost all tools, clothes, personal possessions, electronics, passport, SS cards, etc…everything. Fortunately, I had left some items in my apartment storage out of pure laziness. But nonetheless, ouch. I’ve been involved with a lot of renovations and have never had a break-in before. Police and neighbors were equally surprised – break-ins were unheard of in the neighborhood.

    I took a four week hiatus before getting back into gear, going and buying tools again and getting started. Continued flooring installation myself which was the bulk of the outstanding work.

    image1

    Took on my first roommate in mid-July, a good friend who I’ve worked with on several projects around the world and best yet, a top notch handyman. Updated the bathrooms with his help as well as got some feedback on additional exterior cosmetic updates to add to the scope.

    Mid-August I was burglarized for a second time and this time they got everything that I had left as well as my roommates gear. Again, same this never happens story from the police and the neighbors. This event had me considering quitting the project for a couple of days as I was pretty deflated/over it.

    But about a week later, Hurricane Harvey hit and I had little time to sulk. The house is in Southeast Texas, the heart of the hardest hit areas during Harvey. I didn’t leave the house as Harvey came on and soon after I was stranded along with my roommate and a girl I had been seeing for a couple weeks (lol). We made it for six days, the last three which included no power, intermittent water supply (no toilets/showers) and rising anxiety. The good part is that the house stayed dry. The bad news is that the rain never stopped.

    Picture taken from my garage on day 3, looking out into the street

    Screen Shot 2017-12-15 at 6.46.50 AM

    On day six, we got a break in the weather and were able to escape - barely making it out on the only lane open East or West on I-10, bound for New Orleans. Seven days later we were able to return (no power until the next day), fortunate enough to a house that had not been broken into for a 3rd time – although there really wasn’t much left to steal!

    Picture of that last open lane on I-10. It closed about 2hrs later - as you can see, water was coming over

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    Flooded cars on I-10 on the way out

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    A gas station had been flooded and for about 5 miles, the smell of fuel in the flooded water was nauseating. Note the flooded RV park in the background where only the tops of the RVs are visible.

    Screen Shot 2017-12-15 at 6.46.59 AM

    So where are we now? Early September. Ah! I received notice that I’d be moving back to an International project shortly (score) and with no tools left at the house, I actively began seeking out contractors to just get the house finished and done. But due to Harvey, even my best contractors were overloaded with fat margin work from insurance companies and non-investors from Houston to West Louisiana - I was SOL and on the search for a new crew.

    Lucked out a couple weeks later and was able to assemble a small crew to help with all the finishing bits and pieces. My roommate and I pitched in and we were able to get the house 99% done by mid-Oct – this included a 6’ secure fence along with a new secured sliding door, the old one being a serious weak point during the 2nd burglary.


    I went ahead and installed a new roof on the place as it was badly needed and with me leaving the country, I didn’t want to have to worry about it. Paid a heavy premium on that, again, due to Harvey but it’s done. Also put in some nice recessed interior lighting as well as exterior lighting, both a security and cosmetic improvement.


    New fence (there was nothing previously)

    Screen Shot 2017-12-15 at 6.50.20 AM

    My new secure, patio sliding door - an earlier security weak point

    Screen Shot 2017-12-15 at 6.50.05 AM

    The plus side (if there was such a thing) to Harvey is that I was able to get the other two bedrooms rented out as coworkers had become homeless (their apartments had flooded). In addition, non-flooded homes in my area jumped 10-15% in both values and monthly rents due to demand.

    This was a house-hacking extreme as all of the (3) bedrooms were rented out and I setup a studio apartment in the living room to sleep on a futon for the last few weeks I was in town. As of early Dec, I’ve mobilized down to a project in Mexico and my roommates are all dry, happy and safe in Southeast Texas.

    My "free" living room studio below...

    Screen Shot 2017-12-15 at 6.51.11 AM

    Screen Shot 2017-12-15 at 6.51.28 AM

    Final numbers – renovation ran $24k + 80k purchase price = $104k all-in.

    Rented for $1500/mo.

    Appraisal came back in Nov 2017 at $130k.

    **Reappraised in Jan-2019 at $150k. Still rented out.
    Final numbers/budget break-down are shown in excel below.

    Final Renovation Budget Dec 2017

    Key lessons learned

    >Incorporate security into renovation plans
    >>Allocate budget for fencing, securing perceived weak points and window coverings
    >>Time is money – I could have subcontracted a lot of this work out very early on and finished the house in <4wks vs letting it stretch out over seven months, two break-ins and a hurricane, not to mention lost rental income (could have rented the bedrooms out starting in late April vs mid-July)

    Stuff I can do now that I couldn’t before

    >Install flooring and baseboard (market rate is $2-3 sq ft for labor)
    >Remove a toilet, floor a bathroom and install a new toilet in <90minutes
    >Remove/Install sinks
    >Repair exterior housing
    >Backsplash tiling

    Now for the before & after photos

    Screen Shot 2017-12-15 at 7.04.11 AM

    Screen Shot 2017-12-15 at 7.04.25 AM

    Screen Shot 2017-12-15 at 7.03.56 AM

    Screen Shot 2017-12-15 at 7.05.21 AM

    Screen Shot 2017-12-15 at 7.04.55 AM

    Screen Shot 2017-12-15 at 7.06.24 AM

    Screen Shot 2017-12-15 at 7.06.16 AM

    Screen Shot 2017-12-15 at 7.06.08 AM

    Screen Shot 2017-12-15 at 7.04.40 AM

    Screen Shot 2017-12-15 at 7.05.37 AM

    LIVINGBEFOREAFTER

    Screen Shot 2017-12-15 at 6.50.41 AM


    Screen Shot 2017-12-15 at 6.50.50

    And the final professional photos - not bad for a $24k rehab!

    Final pro photos...

    1 Front

    10 Backyard

    3 Kitchen

    4 Kitchen

    2 Living

    5 Dining

    8 Master

    9 Master Bath

    6 Bedroom

    7 Bath

    7Reply
  • Dominic Balconi
    Lender · Fort Lauderdale, FL · Member since 2017 · 83 posts · 33 votes
    7y

    I have 2 rentals in Ecuador, South America. I lived there for 4 years total and got a good understanding of the market. My competitive advantage in the marketplace was building the properties as opposed to buying them.

    Buying a property is 2-3X more expensive for the exact same property; obviously building is much more difficult and it took me 3 years to identify the best materials and people to be able to get the job done before starting.

    Both properties:

    Duplexes, $60,000 total construction cost, $30,000 interest free loan on the land which will be paid off upon sale of the properties even if its in 20 years (purchased the land from a close family members)

    No mortgages on the properties, therefore incredible cash flow, as obtaining traditional funding in Ecuador is virtually impossible unless for a large commercial project.

    Cap Ex and Repairs on the property are virtually non existent seeing as the homes are only a couple of years old, but I do put aside a few hundred dollars per unit in a savings account for eventual repairs to the property.

    property 1: Unit A, I live in it when I'm there or rent it out on Airbnb for $75-$125 a night depending on the season. If I was never at the property for an entire year I could probably have it rented out for 100-130 days of the year.

    Unit B: $1000 a month in rent, $600 in cash flow, they also pay $50 a month to have my cleaning company inspect and clean the unit.

    Property 2 I charge $950 and $1050 for units A and B and make $600 and $700 in cash flow monthly, respectively.

    Each unit is about 1250 sqft, ocean views, essentially a private beach which is a 1-2 minute walk down hill.

    My COC ROI for these properties is about 25% on average. Good luck finding that anywhere in the US, hehe.

    2Reply
  • Theo Hicks
    Rental Property Investor · Tampa, FL · Member since 2015 · 1k+ posts · 969 votes
    7y

    Location: Cincinnati, OH (Oakley)

    Strategy: plan was to live in one unit and rent out the other, but I ended up renting out both units

    Numbers: $170,000 purchase price ($5,500 down payment), $20,000 in renovations. $2600 a month in rent, sold after 1 year for $220,000

    I had the property under contract after knowing about real estate for LITERALLY 48 hours, so I had no education and experience. As a result, I made a lot of silly mistakes and constantly had anxiety about the property LOL

    1Reply
  • Sam B.
    Rental Property Investor · Houston, TX · Member since 2013 · 476 posts · 294 votes
    7y

    Alright @Dominic Balconi you need to post a thread with pictures and a step by step on how to recreate.

    Shooting you a PM now, great post & story!

    0Reply
  • Daniel Winsor
    Rental Property Investor · FL · Member since 2017 · 36 posts · 21 votes
    7y

    Military guy here, so I have an advantage in some ways. Got sent to Key West for a ~3 year stint middle of 2018. I was luckily there for work two months prior, so I was able to start looking at some places. I was looking for SFH and duplexes. The one I ended up purchasing never hit the market, but the female owner had a rough year and my agent said she'd probably want out of there for the right price.

    Military provides an allowance for housing. It jumped from $1300 to over $3000 a month after moving from California because of the Key West prices. As I'm not married, I couldn't live on base.

    Ended up buying a 3/2 and 1/1 duplex for $550k. Put about 60k down and used a VA loan for the rest. Total monthly price is ~$3100. I was trying to rent the 3/2 for a couple months for $3500 before I realized I needed to do a little work inside to get it rentable. Ended up sinking about $3-4k to fix some of the interiors, take down a lot of crazy shelving, and paint just about the entire house. Needs some ongoing renovation (remove a skylight in one of the bathrooms, install ceiling fans with lights in the living room, etc), but nothing needs doing immediately.

    Currently rented out the 3/2 to a single guy for $3300 a month. I'm paying the entire mortgage from that, plus putting a couple hundred in my pocket. The biggest factor though, I'm now pocketing the ENTIRE $3k from my housing allowance. I realize I can't say I'm cash flowing over $3000 a month, but, compared to the majority of my peers, I am! When I move out of the 1/1, I'll have updated the floors and kitchen, plus slapped some new paint in there as well. Expecting to be able to pull in $1800 for that. 

    I got very lucky with the deal timing. To live for free in Key West is not easy to do. I am putting the $3k a month into an account to try and buy another house in a year.

    3Reply
  • Krystal Thomas
    Real Estate Agent · Key West, FL · Member since 2016 · 23 posts · 6 votes
    7y

    Hi Daniel, great story of a successful house hack!  I'm a real estate agent in Key West and currently have a very similar home to yours on the market if you or anyone you know are looking for a similar opportunity.  3/2 in the main house and a 1/1 in the back.  The long term rental market here in the Keys is very tough and the inventory is limited.  There is literally a 0% vacancy rate here, once you find a good place you never want to leave!  

    0Reply
  • Mark Hove
    Real Estate Broker · Durham, NC · Member since 2018 · 43 posts · 61 votes
    7y

    @Craig Curelop

    Love this thread! Great idea! My fiancé at the time, now wife, but our first home (duplex) in October, just a few months back. Got married in November, renovated unit A, and moved in mid-January.

    Bought off market for $164,000. It appraised for $182,000 at the time of purchase. Put about 12-15k into unit A... new tile, new shower, new countertops, new appliances, paint throughout. I’m a realtor and so I’m always checking comps- I’m confident we could get at least 215k for it now.

    We currently live in unit A. Our mortgage payment is $1108. We put 5% down FHA. We are planning to refinance to conventional soon which will drop the PMI and will hopefully get our payment below $1000. Unit B has not been renovated to the extent of unit A and it rents for $845. My guess is when we move out we'll be able to get at least $1000 for unit A.

    So while we live there: our housing expenses total $500 or so a month. Mortgage, utilities, and then subtract rental income. It’s nicer than I would have ever imagined living as a recent graduate and newlywed.

    When we eventually move out, we’ll have an estimated $1900 in monthly income and a payment of $1000. Not too shabby. It’s been a great experience. Now trying to find the next deal :)

    3Reply
  • Zac Burk
    Flipper/Rehabber · Metro Detroit · Member since 2018 · 13 posts · 12 votes
    7y

    It all started after a divorce. I picked up work to stay busy. Kept myself outta my head. After 3 years, I had a hefty chunk saved up and a plan to execute. I purchased my first home, a duplex, conventionally. It wasn't a major overhaul. The lower unit was turn-key and the upstairs need a entire facelift. Altogether, my payment was 545$ and I rented the 2nd unit for 550.  I refinished the floors upstairs and signed a lease with a friend who was homeless. The unit was terrible but he paid and we both understood the circumstances. A year later, I moved out of the 1st unit and finished the 2nd unit. Rent was raised a 100$ and now with a 2nd lease I'm cash flowing 800$ monthly before cap-ex. All the cash I saved from house-hacking went straight into savings for my next place. I now have a live-in-flip that i purchased for 3% down, roughly 30% under average per sq/ft. 

    2Reply
  • Sam B.
    Rental Property Investor · Houston, TX · Member since 2013 · 476 posts · 294 votes
    7y

    Great before/after and a good story @Zac Burk

    0Reply
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