Completed Deal Diaries: House-Hacking in Houston TX $900 cashflow

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Completed Deal Diaries: House-Hacking in Houston TX $900 cashflow

Stanley Ezeadi
Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes

Hey guys, it feels like it was just yesterday that I made my newbie intro on BP. Last month I gave the keys (keypad code) away to the Master Bedroom of my first House Hack and preparing for my next move which closed a few weeks ago. Here are the numbers! (Note: I have owned this property for 1 year now. This one closed Jan. 14 2020. )

Purchase Price: 189K

Financing: 3% down Conventional, my cash to close came out to $7435.12

Renovation: 

Re-pipe home +water heater- $4800

Paint/Wall patching: $1200

Appliances & Misc: $1000

This property had OK bones but was pretty dated. I did some DIY painting and a friend helped with selecting some tasteful decor which has gotten some great compliments. This property is a 4 bedroom 2.5 bathroom home in Brays Oaks near Meyerland. I rent this property by the room and it does pretty well. I rent 3 of the bedrooms for $650 and the Master for $700. 

Estimated Value of home today: 245k

Rents Received: $2650

PITI: 1450

Utilities + Lawn Care+ Internet: 280

Monthly Cleaner: 40

Cashflow: $880

Note: I have a 10K reserve fund for this property. 

Also I was able to rent my spare bedrooms before my mortgage was ever due so I have never actually paid the mortgage out of pocket. 

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Bruce C.
Seabrook/Galveston · Member since 2018 · 274 posts · 178 votes
5y

Nice!  I wish I’d done the same before I got married, or even before we had kids.  Are these long term roommates or college students/str?  What is your second property?  Have you looked at duplexes-quadplexes?

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  • Bruce C.
    Seabrook/Galveston · Member since 2018 · 274 posts · 178 votes
    5y

    Nice!  I wish I’d done the same before I got married, or even before we had kids.  Are these long term roommates or college students/str?  What is your second property?  Have you looked at duplexes-quadplexes?

    1Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    @Bruce C. These are medium term roommates or tenants. I write my leases for 6 months a majority of them have been there for a little over a year.

    My second property is a repeat of the first and much closer to my new day job.

    I have looked into Multi-family, I just haven't found a good deal...yet. 

    0Reply
  • Haroon Qamar
    Accountant · Fort Worth, TX · Member since 2018 · 7 posts · 1 vote
    5y

    @Stanley Ezeadi That’s so cool man, congrats on the success! My parents have been doing something similar here in Katy. I’m graduating college soon and have capital saved up to get started on this exact strategy as well.

    A couple questions if you don’t mind: what was your criteria when searching for the properties? Also, how did you search for them? Did you use a service like Zillow or hire a realtor?

    1Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    Hey @Haroon Qamar I was looking for a 4 bedroom 2 bathroom home over 2000sqft with ideal parking and that was either close to or in a popular area in town. I also wanted something that needed some minor work under 200k. 

    I used a realtor for my purchase. I met them at a Bigger Pockets meet up  a little over a year ago. We are pretty good friends now! 

    0Reply
  • Ridge Tullos
    Real Estate Agent · Houston, TX · Member since 2020 · 51 posts · 44 votes
    5y

    Awesome! Congrats on your success and good luck with your next property!  Hopefully it is as lucrative as this one has been!

    1Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    @Ridge Tullos Thank you!

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    @Stanley Ezeadi This is a great win man! Congratulations and go get the next one.

    Let's connect and see what we can do together.

    Goodluck Bro!

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    0Reply
  • Stone G.
    Real Estate Agent · Sugar Land, TX · Member since 2016 · 23 posts · 6 votes
    5y

    @Stanley Ezeadi. Love to hear it! Where’d you find your roommates at? Or were they friends of yours?

    0Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    Thanks! @Wale Lawal


    @Stone G. I found my roommates via Facebook groups, roomies(roommate website), and room for rent (roommate website)

    1Reply
  • Brandon Dove
    Flipper/Rehabber · Houston, TX · Member since 2021 · 6 posts · 1 vote
    5y

    @Stanley Ezeadi

    Congratulations man that’s a sweet deal! I’d lien to house hack with a multi family this year here in Houston.

    Couple questions.. What % did you save for vacancy? Haven’t heard of a good number when renting rooms out.

    Did you know your roommates prior to renting out and did you run into any problems with that many different people under one roof?

    Finally, what was your estimate for repairs prior to actually getting them done or estimated by a professional, were they accurate? If so what is your rule of thumb when it comes to repairs?

    Once again man awesome job!

    0Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    @Brandon Dove I’ve already bought my second house hack and I’m wrapping up Reno it is another single family. Multi-family will be my next house hack move by the end of 2021.

    I don’t necessarily budget monthly for vacancies. I have a 10k reserve fund that I will pull from when a vacancy/repair comes up. In 2020, I had one vacancy but I was able to fill the room in about 10days there was always a large pool of candidates for me to pull from. So really none but I anticipate I will get one eventually.

    I did not know any of my roommates. Most of my roommates were working 50-70 hours a week in different industries and we never really crossed paths much. We were all pretty busy with our own lives and really maybe talked for a few minutes when we did run into each other at the home. Everyone pretty much stayed in there own lane and was cordial.

    I estimated 10k for repairs and came out a bit under. This was just based on some ball park quotes I received for the work I wanted to get done. My rule of thumb is to use the guys that your investor friends are already using. If you don’t have any, get 5 quotes and pick the guy/gal that was on time and was also reasonably priced.

    1Reply
  • Effram Barrett
    Real Estate Agent · Houston, TX · Member since 2017 · 159 posts · 161 votes
    5y

    You have a cool setup man. I am curious if you had trouble getting insurance, primarily flood insurance and is it pricey?

    1Reply
  • Conor Kearns
    Rental Property Investor · Houston, TX · Member since 2018 · 30 posts · 8 votes
    5y
    Congratulations Stanley! I've been thinking about getting into rent-by-the-room. Seeing these numbers really have my gears turning now.

    When it came to renting the rooms out, what did the process look like to ensure compatibility among the various renters (and personalities) living under the same roof?
    1Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    @Effram Barrett Flood insurance was not required on my home. Also the home has never flooded.

    1Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    Hey @Conor Kearns renting by the room has been a good experience for me so far. But it is very easy to pick the wrong tenant if you don’t stick to your criteria. And it's also important to note that there is only so much you can control. Personalities, which is one of them can be faked.

    I interviewed every serious inquiry that I received about renting my rooms. The two main items I was looking for is that they are friendly, not related, and that they live their own busy lives. I saw that when you have 4 people living together who work 40+ hour weeks, they rarely cross paths with each other.  Most of my tenants will greet each other and have only had a handful of conversations in a years time. They all have there own entertainment centers such as/TV's in there rooms so there were no arguments there. They also all commit verbally and on paper(via the lease) to clean as you go. Also at one point I did have a bi-weekly cleaner who would get a deeper clean of the property. 

    I also went about making a list of items that would make a bad roomie/cause argument/not so great experience and I put standards/processes in place to ensure that everyone has a good living experience and are cordial.

    For example...

    I never split utilities.. estimate the cost and automatically include it in the rent.

    Buy all shared toiletries... I charge an application fee for every tenant that is serious about renting, I use this money to go towards a year supply of toilet paper, nice and trendy soaps from Marshalls/ross, paper-towels and other essentials. You wont get any arguments about who's turn it is to buy what.

    Promote a clean environment! Always have cleaning supplies present and visible. But also hire a budget cleaner to keep shared spaces extra clean. I found that when doing this everyone keeps up with the shared areas and really my cleaner is just going in to sanitize restrooms, wipe down countertops, dust and mop.

    Don't try to delegate any home maintenance , just outsource it and include it in the rent. Cutting lawns are a waste of time unless you love doing it. 

    Don't rent to couples.

    Screen your tenants and treat it like a regular rental. Have a lease and include rules. Always keep your price firm, and if a potential roomie or tenant ever mentions an excuse or what if about the rent or deposit during the interview, they are most likely not the tenant for you. Also I do background checks, and review paystubs, and review social media.

    I also write leases for 6 months and review the lease with the roomies. 

    Lastly, Give them nothing to argue about. Keep the place tight and your tenants will most likely do the same. Give it an airbnb vibe (stage/furnish it with your decor) and think about the last time you stayed in one and how did you treat it?(Most likely with care, your tenants will most likely do the same). My tenants say it feels great paying rent on the 1st and knowing the cleaner and landscaper will be there on the 2nd.

    Sorry for the long reply I just wanted to make sure I put it all out there! Best of luck!!

    4Reply
  • Elin Trinh
    Honolulu · Member since 2020 · 134 posts · 51 votes
    5y

    @Stanley Ezeadi - Congrats!!

    1Reply
  • Larry Jonathan Denson
    Rental Property Investor · Houston, TX · Member since 2017 · 13 posts · 11 votes
    5y
    I rent rooms as well. I will take some of your suggestions to heart. I am at an  extreme difference with whom I rent to which is felons only.  I do this in tandem with a billion dollar company that hires felons. It could be considered workforce housing as well.
    1Reply
  • Larry Jonathan Denson
    Rental Property Investor · Houston, TX · Member since 2017 · 13 posts · 11 votes
    5y

    @Stanley Ezeadi

    It would be great if you could see my property at 12318 Clear River drive Houston TX 77050 A few pictures on Redfin.

    I think it's something you aspire to.

    Convenient parking for at least 7 cars.

    ADU in the rear (apartment A).

    Small efficiency on back of house.

    Main house 4 bedroom 2 bath.

    0Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    @Larry Jonathan Denson beautiful house! I’d actually would love to see the layout in person if you’re up for it! Thank you for sharing!

    0Reply
  • Bruce C.
    Seabrook/Galveston · Member since 2018 · 274 posts · 178 votes
    5y

    @Stanley Ezeadi how did things go with roommates during lockdowns and wfh over the past year?  Did any of your roommates still have to go in to work? Y’all have any quarantines in your shared home?

    0Reply
  • Matthew Rolf
    Insurance Agent · TX · Member since 2018 · 362 posts · 175 votes
    5y

    @Stanley Ezeadi awesome write up!  What an awesome start.  Could you share with me who your had repipe the house?  I have a client needing the same thing and we haven't been able to find a quote for that affordable.  Thanks!

    0Reply
  • Matthew Rolf
    Insurance Agent · TX · Member since 2018 · 362 posts · 175 votes
    5y

    @Haroon Qamar I'm out here in Katy too if you ever want to connect!

    0Reply
  • Stanley Ezeadi
    OP
    Rental Property Investor · Houston, TX · Member since 2019 · 46 posts · 45 votes
    5y

    @Bruce C. Things went overall well. I had one roommate who had to work from home and it didn't really bother anyone. I had another roommate once the stay at home order was first launched his place of work shut down and he was home but again still made rent and his job opened up again in 30 days. Stimulus probably helped the roomies/tenants out a lot as well. Lastly we luckily did not have any quarantines or anyone contract the virus.

    @Matthew Rolf Unfortunately these are 2020 prices. I got a quote again from the same guy and it was not even close to being the same. I have one plumber in mind that may be investor friendly if you mention it. DM me and I will pass on the contact. He helped me fix all my water pressure issues and installed all my faucets and toilets in about 2 days for around $200.

    0Reply
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