Just Moved Here and Excited to Start!
Hello all! I just moved to Huntsville and I am very excited to begin my REI adventure. Initially, my plan was to house hack multi-family homes, however it seems that those are few and far between here. So, I'm pivoting to finding a SFH that I can live in while renting out the other rooms.
I am also excited to meet people in this space and to build up a team. I’m going to try to hunt down some meetups, if they exist here.
One of the things I am most concerned about is accurately analyzing deals. Any advice or resources on how I can be sure that I’m not missing anything in an analysis that will come back to bite me later?
Most Popular Reply
@Casey Cole - it sounds like you are heading into analysis paralysis, as they call it here, which is not a good place to be. Worrying about +/- $50 on utilities will get you there quickly.
Pull back to the bigger picture - if you live in a SFH yourself, you pay all mortgage, repairs, utilites, etc. Simple, right? If you house hack, how much closer can you get that negative into a positive? Even if you lose $50 a month on a house hack, that's a lot better than losing say $1500 to 2000 a month, right? I think the optics on a house hack are different in general - but if you can get it to a positive cash flow, sure, that's a huge win; but negative say around $100/month while the tenant(s) are paying down substantially more on your mortgage is still a victory with a house hack.
Let me give you an analogous example with a SFH - we bought a rental in Jones Valley in 2017 (prices were very, very different then). We knew it would negative cash flow at the beginning (granted, we do our cash flow analysis based on commercial loans with a 15 year amortization, so our criteria is very, very tough). So, what did we do? We bought it because a rental opportunity in Jones Valley is a unicorn (even was back then). Fast forward to 2022 - it is now positive cash flow, the appreciation was amazing (at it is everywhere), and we control a SFH rental in Jones Valley, which will never have a vacancy since rentals don't exist there for under $2000/month. Oh, and the tenants have paid off almost 5 years of the 15 year mortgage - there's the big picture look - so losing $150/month for a few years to reach this point was absolutely the right decision.
Moral of the story - don't let +/- $50 or $100 a month affect your decision. Look at the long term picture for your house hack, and see how the numbers look over 5, 10, 15 years, not just on a monthly basis. Good luck.