House Hacking Next Steps

House Hacking Next Steps

Member since 2021 · 15 posts · 6 votes

Good Morning BP,

So a few month ago I had posted about how I wanted to house hack and needed some input on whether my goal and timeline were realistic. Now, a few months down, I have spoken to a few lenders, and it seems like the dream is more and more likely by the month. My problem before was knowing whether I would be able to afford and get a house within in a year. Now I need to know more about the market, how to crunch the numbers and find a good property.

To give a little backstory, I want to buy a 200k house, and rent it out to my current roommates (there's two of them). We are good friends and I am not necessarily looking to profit off them, more so just live cheaper than we are living now in apartments, and in a house together. When they graduate from college and go back to their hometowns is when I actually want to begin cash flowing. This is all just an idea as of now though. I have thought about charging them more than I would be paying monthly, and they said they would be fine with that. I am just not sure how much to charge them exactly. 

Anyways, how do I know whether property A of 200k will be better than property B of 200k. What numbers or factors do I look for to say, "this property is gonna be really good, go up in value, cashflow nicely when my roommates move out in 2 years." I live in San Antonio, TX, and the area I am looking to get the house in is an area with a lot of things to do around it, and next to two large educational institutions and a few big San Antonio attractions. I have been using Zillow and its monthly cost calculator to see what the monthly expenses would be for every house. The costs usually come out to $1400-$1800/month. From those numbers, 3 of us and my girlfriend will be living in the house, so say 1800/4 + utilities estimate, we would come out to around 500/month each if we split the costs evenly. After they move out in two years, if all goes well, I hope to buy a second property and turn this house into a rental.  

In all, what exactly should I look at when I am searching for a house? What should I look for in my market? And how do I go about charging my roommates a reasonable price, while also thinking about rental income after they move out? 

I feel like I am all over the place, sorry, it is my first house and I just want to have a great start to my real estate investing. Thank you all for your advice and I look forward to speaking with y'all. 

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Dan GuentherBusiness Member
Real Estate Agent · Longmont, CO · Member since 2019 · 548 posts · 271 votes
5y

@Pablo Cuevas

Congrats on taking the next steps towards your first investment. There are a lot of factors to consider and it can be very overwhelming at first. It will be helpful for you to take a step back and look at your big-picture goals/long-term goals? Are you going to want to hold this place long-term and are you comfortable renting out as a student rental 5-10 years from now? 

I'd think about your exit strategy and decide on a location first. Once you determine that you can start thinking about what house fits your crietra. 

Let me know if you have more specific questions and I'd be happy to help narrow things down a bit for you.

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  • Member since 2020 · 14 posts · 6 votes
    5y

    Hello Pablo! I would first start off with the location of the house. You can change most things in a property; however, the location is inherent to the land! Check to see if there are grocery stores nearby, restaurants, etc. These are things that will help you keep it rented in the future. Best of luck with your first house hack!

    Kyle Ly | Keller Williams Carlsbad

    DRE # 02137004

  • Dan GuentherBusiness Member
    Real Estate Agent · Longmont, CO · Member since 2019 · 548 posts · 271 votes
    5y

    @Pablo Cuevas

    Congrats on taking the next steps towards your first investment. There are a lot of factors to consider and it can be very overwhelming at first. It will be helpful for you to take a step back and look at your big-picture goals/long-term goals? Are you going to want to hold this place long-term and are you comfortable renting out as a student rental 5-10 years from now? 

    I'd think about your exit strategy and decide on a location first. Once you determine that you can start thinking about what house fits your crietra. 

    Let me know if you have more specific questions and I'd be happy to help narrow things down a bit for you.

  • Real Estate Broker · Forney, TX · Member since 2019 · 1k+ posts · 399 votes
    5y

    @Pablo Cuevas, welcome to the BP community! Wishing you the best of luck. I recently posted a blog on house hacking - worth a read! 

  • Member since 2021 · 15 posts · 6 votes
    5y

    @Dan Guenther

    Hey Dan thank for responding!

    So I have the location down already I have been checking zillow multiple times a week to see how fast the houses sell and prices. I know where I want to buy the house the ideal location, and also the next area if the ideal doesn’t work out.

    I have also decided that I do want this to be a long-term rental for students in the college area and even for those in the medical center area. The first two years will be for my current roommates and then I am planning on moving out. I want to hold it as a full rental after those two years and then get another property, starting the process over again.

    So my main question is how do I search and find a good investment property, what numbers to crunch and look at, which will then tell me whether this property will be a good investment in the long run or whether I will end up earning very little or losing money when I turn it into a full rental?

    The location and the time horizon are set it is just the numbers that I am not totally knowledgeable on, and seeking advice on.

    Thank you for your help Dan.

  • Member since 2021 · 15 posts · 6 votes
    5y

    @Anthoney Hanks

    Hey thank you Anthony, I will definitely have to take a look at it tonight!

  • Member since 2021 · 15 posts · 6 votes
    5y

    @Kyle Ly

    Yes the location has been my priority since I had started thinking about getting into house hacking! Thank you for the push!

  • Dan GuentherBusiness Member
    Real Estate Agent · Longmont, CO · Member since 2019 · 548 posts · 271 votes
    5y

    @Pablo Cuevas

    That’s where the BP calculators come in handy. You can also find some free calculators online. DM me and we can run through a practice or two.

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