Where Deals Get Risky

Question

House hacking still works, but the margin for error is thinner right now.

The biggest risk I see:

• Relying too heavily on projected rent
• Stretching too far on purchase price
• Not accounting for vacancies or turnover

The deals that hold up:

• Work even if one room sits vacant
• Don’t depend on perfect tenant placement
• Keep some breathing room in reserves

Are you  underwriting conservatively on house hacks right now?

Aaron Zimmerman · Answer

Agreed. This applies to all deals not just house hacks. Reserves are #1 priority in my opinion. You have to be able to sleep at night

Bryan Coll · Answer

I don't think it's just house hack deals. I think you should underwrite conservatively for every asset class/situation.

There is a reason the call them black swan events.

And even without those events, it's much easier to get financing if you need it when the numbers work at or worse then your projections but you end up completely exceeding your projections.

Under promise, over deliver.