New to House Hacking and Real Estate -- Looking at BRRR long term

12 Replies

Hello everyone!

I've been a listener of the BiggerPockets podcast for about a year and have been reading up on several online articles and started collecting book recommendations to better prepare me for this journey.

I've decided to start off this journey by House Hacking, and have been considering multi-families/duplexes/triplexes in Minnesota for this project. Eventually, I intend to build a system to automate analyzing properties and begin a BRRR process with each property that shows the right numbers (when I could afford them).

I'm currently saving up enough capital and emergency/vacancy funds before entering a House Hacking project. I'm also actively trying to improve my analytical skills when looking at properties so I could get a feel for the market here in MN.

I would like to ask the community to throw any information they may have that could help me out! Any link to a similar post as this, their own tips and tricks that have made them successful, useful links/bibles to all kinds of preparatory steps and strategies, knowledge of the MN market and baseline knowledge I should consider, wisdom on House Hacking overall and even book recommendations. I'm open to anything and am willing to connect! I'm appreciative of all that I've read so far, and I am looking forward to what you have to say! Feel free to DM/Email me if you would like!

Hey Mahad!

I think househacking a multi-family home in Minneapolis is a great way to get started, that's what I'm doing currently. Listening to the biggerpockets podcast is a good way to start for building baseline knowledge and also to hear other people's stories to fuel your own fire and show you the roadmap, and since you've done this for awhile I'd say the next step for you is to start reaching out to loan officers and real estate agents to build a network for when you're ready to make that first purchase.

For loan officers I can recommend three that work with investors heavily and I've only heard good things about: @Tim Swierczek , Conor Hesch, and Kim Burke. It's great that you mentioned you are working on saving up money for your first purchase, it's super important to have reserves and the more you have, the more renovations you could potentially make to force appreciation and boost your cash flow too. Since you want to get into BRRRR later, this would be a good introduction to it. But anyhow, although Covid makes meetups less likely I'm sure you could hop on a call with any of these 3 and they'd be able to help you get in a position for your first purchase.

Next you'd want to link up with an agent. Side by side Realty is a group that was started by Scott and Drew Hoefler and specialize in investment properties. Alyssa Strom is also in their group and they have all done their share of house hacking and helped buyers get their own so they'd be a good place to go. I'm partial to the Duplex Doctors as they helped me get my first duplex. My agent was Kent Hranicka and I've also interacted with Clark Lensing and Jason Reed who started the group. All good dudes who invest in the twin cities so they know the area and are very knowledgeable as well. 

For other good resources, I'd say the Millenial Investor Focus Group on facebook is the best because it's a large group of investors in the Twin Cities so you can ask very specific questions about local ordinances or get referrals for various contractors, as well as just meeting other like minded people. I'm sure you've probably done this already but if you search Minneapolis house hacking on these forums you'll probably be able to find some good info from past threads too, I know I've commented on a few. For books, The house hacking strategy by Craig Curelop is a good deep dive on the subject but be mindful that every market and invidual's situation is different so YMMV. 

Best of luck, and if you want to meet up sometime once this pandemic dies down let me know!

@Mahad Omar welcome to the BP community! House hacking is how I got into the industry as well. I have used Neighborhood Scout to help analyze things like crime, growth, etc. BP has many books for beginners and a free Ultimate Beginners Guide on the site. Feel free to reach out anytime. Best of luck.

Originally posted by @Brian Loibl :

@Mahad Omar welcome to the BP community! House hacking is how I got into the industry as well. I have used Neighborhood Scout to help analyze things like crime, growth, etc. BP has many books for beginners and a free Ultimate Beginners Guide on the site. Feel free to reach out anytime. Best of luck.

Happy to be here! Thank you for that tool and some resources! I will definitely connect soon, I appreciate you. 

@Mahad Omar welcome man! I'd second everything @Evan Kraljic said, spot on. At this point you seem to have great foundation of knowledge. I'd say just jump in.. I've found that investing is a lot different than you think I'll be, there are days when the grind is almost too much, but just push through and you'll find great reward on the other side! I'm sure we'll connect at a meet up as well. Best of luck! 

@Mahad Omar a unique attribute to House-Hacking is generally that location matters, because your living in the investment as your primary residence and with that local to a job and so on matter. So rather than say MN, which can be anywhere from International Falls too Chippewa Falls and everywhere in between, identify the geographic rings of viability, a primary interest area, secondary, and consideration. 

From there it's acquisition game plan, if your going to be developing yourself and all the work involved, or if your going to be looking to network such as turn-key wholesalers, REI agents, retail agents. With that decision made, you now have your road map.

After decisions are made, financing known which establishes a budget, now whats left is the work of the work. 

To try and master assessment and every number is a waste of time until your assessing actual potential real-world deals, because variables will always be at play that constantly change any "perfect" assessment plan. For example, I am watching right now as some of my choice markets descend into anarchy and burn to the ground from riots and the governments actions of allowing the Purge vs instituting law and order. What would be a home run deal last week is a now-way-jose deal today. 

Step 1, set the geographic area of opportunity

Originally posted by @Noah Chappell :

@Mahad Omar welcome man! I'd second everything @Evan Kraljic said, spot on. At this point you seem to have great foundation of knowledge. I'd say just jump in.. I've found that investing is a lot different than you think I'll be, there are days when the grind is almost too much, but just push through and you'll find great reward on the other side! I'm sure we'll connect at a meet up as well. Best of luck! 

 I appreciate your support and push to dive in Noah! I think I'm at that point already! Honing my skills nowadays and starting to talk to the right people to get the ball rolling. I appreciate you man, hope we can connect soon!

Originally posted by @James Hamling :

@Mahad Omar a unique attribute to House-Hacking is generally that location matters, because your living in the investment as your primary residence and with that local to a job and so on matter. So rather than say MN, which can be anywhere from International Falls too Chippewa Falls and everywhere in between, identify the geographic rings of viability, a primary interest area, secondary, and consideration. 

From there it's acquisition game plan, if your going to be developing yourself and all the work involved, or if your going to be looking to network such as turn-key wholesalers, REI agents, retail agents. With that decision made, you now have your road map.

After decisions are made, financing known which establishes a budget, now whats left is the work of the work. 

To try and master assessment and every number is a waste of time until your assessing actual potential real-world deals, because variables will always be at play that constantly change any "perfect" assessment plan. For example, I am watching right now as some of my choice markets descend into anarchy and burn to the ground from riots and the governments actions of allowing the Purge vs instituting law and order. What would be a home run deal last week is a now-way-jose deal today. 

Step 1, set the geographic area of opportunity

I really appreciate this sound advice, James! I haven't really focused too much on specific geographic factors other than areas that I'm interested in moving to for career opportunity or ambition. Mapping out areas based on levels of viability, primary/secondary interest etc would be the first things to add to my game plan to start off with. Being able to visualize what works for me and applying it to the markets that best interest me and hone in on the ones that fit with this plan would be efficient! This is beautiful advice, I will be working on templating this eventually. Thank you again man!

Some people have told me to try to avoid the cities of St. Paul and Minneapolis for tax purposes, and to buy in the suburbs. But there are so many more multifamily properties available in the more urban areas. I'm new to this site, but how great to have people like James and others to help out. Good luck to you, Mahad.

For house hacking knowing your ARV and your rehab cost is super important! A good book you could check out is Estimating Rehab Cost by Jay Scott. Also don't be afraid to reach out to me if you need me to pull comps in the market your investing in.