How Risky Was Your First Deal

[Patric Sepulveda]

Hi everyone!

So we all hear the success stories and how people took big risks to get big payoffs. But that makes some people uncomfortable. So how risky was your first deal? What were the things that almost scared you away but you found solutions to and overcame? 

[James Bradin]

Originally posted by @Patric Sepulveda:

@James Bradin Yeah, I think that it was the Real Estate Rookie podcast where someone said that House-Hacking is like real estate investing on training wheels. I am looking to make my first investment as a house hack. It's interesting to hear about different markets though, because here in Phoenix, there are a lot of multi-unit properties where a reasonable rent would only just meet the mortgage payments. What resources did you have/use when you ran your numbers for that first deal?

I purchased my first house hack in 2016.  At that point I had listened to every single BP podcast.  Around that time they were still really pushing the 2% rule.  It wasn't until 2017-18 that people began to mention "1% rule" instead.  During that time I ran the numbers knowing that my $210k duplex would be around a $1200  montage payment.  I was confident that I could rent the other side for $1000 a month.  I knew that that I would never find a place to rent for $200.  I house hacked  that duplex for 4 years.  Needless to say, my financial future was set.  I am currently under contract on another duplex that I intend to house hack for a year, and then possibly use as a vacation rental.  If you have any specific questions on house hacking let me know.  Brandon Turner's book on Managing Rental Properties is worth its weight in gold in my opinion (not even kidding).  That book has made me more money than any other book in my real estate career.