What Are Your House Hacking Success / Challenges?

Question

Hello All,

I have just begun my search for a MF property to house hack in upstate New York (Capital Region - Albany Metro). My goal is twofold, to gain experience as a RE investor / property mangement, and reduce living expenses so I have more flexibility to make career/life decisions - pretty straightforward, right?

What are some recent stories of House Hacking Success?

What are some challenges you have encountered along the way?

Anything in between to share?

Thank you!

James

Rick Albert · Answer

@James Ciccarello,

The first one was a condo, which is fairly easy. The second one I did a renovation, addition, and converted the garage into an ADU. In hindsight I should have found a more "done" home and then converted the garage using the remaining balance of HELOC from the condo. Would have saved time and money.

Rick Albert · Answer

I've house hacked two properties in Los Angeles and ultimately did well (I just sold one for almost double what I paid for it). The thing is time and what your short and long term goals are. With these higher interest rates, you have to be a little more particular with what you buy but not necessarily so picky to where you are not buying anything and still renting.

My strategy has been buy fixers, fix them up, and then rent out. It gave me leverage to do what I want and attract tenants who would appreciate it as well. There is carrying costs associate with it but you just factor it in.

Conner Olsen · Answer

I was frustrated that nothing cash flowed when I was looking for a property in 2020. Mortgages on a duplex were $2,200-$2,800 and gross rents were $2,000-$2,600/unit. I learned about the MTR strategy and found comps on Airbnb and decided to make the leap. Bought a duplex at $435k with a mortgage of $2,400/month and gross rents of $2,450/month. The Airbnb comps for the other unit of my duplex were showing that I should be making $1,950/month in payouts. I listed for $2,100 and it was booked for 6 months straight with no vacancies. I increased my rates up to $2,650/month on that unit and started living for free! I recently moved out of my unit and renting it for $3,100/month. Gross revenue is $5,750/month and cash flow is around $1,700-$2,000/month. My advice is to get creative with your rental strategies.

Michael Brattelli · Answer

@James Ciccarello I got a great off market historic duplex in an A class area and in one more year the rent from one side will cover the mortgage and I live in the other. It has greatly reduced my personal expenses. That being said I’ve had to put a lot of money into the house considering the age but I was prepared for all of that so there weren’t any surprises. I inherited tenants and they pay on time every month with very little hassle from them. Just be patient and wait for a deal that the numbers work. Good luck!

Jared Hottle · Answer

I have a ranch house. Finished the basement with a bedroom and bathroom and have opened it up to traveling nurses and summer interns. Biggest challenges are I only have one kitchen and parking is somewhat of an issue but I will have my entire mortgage paid for the year and the amount of peace of mind and freedom that gives me for a low level of inconvenience is so worth it. Hoping to parlay it into a luxury duplex in the future and continue doing the same.

Hanna Gleue · Answer

I'm in nearly the same position as you, so I don't have a great success story yet. But I'll tell you what's been going on so far.

I was lucky to have a neighbor who started his RE journey a couple months ago. He referred a phenomenal agent/fellow investor so has been guiding me through this process.

Biggest struggle is that nothing cash flows in my area. We have decided that buying a single family and creating an ADU is the most cost effective way to get our goals met. Rent from multi family units do not even cover the mortgage - Let alone all the other costs we would need to save up for. We have analyzed many properties, physically visited about 10, put offers on 3, one was accepted but we pulled out after finding out that area had different zoning than everything else around it and wouldn't suit our needs.

We tell everyone our goals. And that has made the difference! Someone called us a couple days ago and mentioned they knew someone who knew someone else who needed to get rid of a property off market. They were asking 60% of market value and was in the heart of the area we wanted most!

Finally the numbers worked! We're excited to begin our house hacking journey as our first step into RE.

Donald DiBuono · Answer

Hi James,

I have actually done this 3 times in the capital region...but with a twist. I house hacked 3 flips - 1 in Rotterdam, NY 1 in Troy, NY, and my current residence is in Wynantskill, NY. We are going to stay in Wynantskill for a couple years so I took a HELOC to continue my real estate journey. I also have a duplex in Troy, NY. The rents are pretty high and you can still find some on market properties that make sense financially. If you have any questions, dont hesitate to reach out!

Christian Ehlers · Answer

One of the challenges for me with helping clients househack is that the majority of the multifamily properties in my area are very old (1850-1970) so they all have different and sometimes outdated layouts, can need large improvements to be updated, and it is still expensive to buy multifamily here given these factors (300-700K) for a 2-3 unit.

Another thing my clients often struggle through is they find because it is so expensive here, the properties don't cashflow day one with them living there. I often have to remind them this is just a starting point, and then rents will rise and eventually they will move into a new one and they will cashflow very well!

James Ciccarello · Answer

Thanks Rick. How extensive is the fixing you do? Have you found any types of value adds that are relatively easy to learn / understand that make a difference in what you're able to buy?

What Are Your House Hacking Success / Challenges?

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