All Forum Posts by: Anthony Swain

Hey @Felix Lilly! 

Congrats on medical school! Albeit a challenging road ahead, but very rewarding. A fellow clinician & investor myself. Best of luck with school!

I remember listening to a BP Rookie epsiode that sounds like it would help you! 

https://www.biggerpockets.com/blog/rookie-372

I think they mention investing in a nearby smaller city with more affordability, but great investment indicators. Providence maybe?

I hope you make some good connections here and they help guide you on your journey. 

Take care

-Ant

@Tony Mendoza @Tracy Scott

Hey fellow house hacker here!

I'm glad you brought this up. I feel like this is suchhh a common question for new house hackers, including myself. 

From what you mentioned, it sounds like you want to remove liability. After doing a lot of my own research, it seems like there are other ways to safeguard your personal liability. @Melanie P. mentioned umbrella policies, which I have heard many many others mentioned before. Some would argue this offers more protection. Aside from the umbrella coverage, you can do everything in your power to make the property safe. Take care of anything that seemingly could be hazardous. I'm sure you can include specific clauses in your lease to protect from a tenant's own negligence too.

Also, you mentioned you want the income to be separate from you personally. @Stuart Udis explained this perfectly. A single member LLC would be a pass through to your own returns.

You should consider speaking to an accountant or tax advisor to understand any potential consequences of such a move.

I hope this thread helps you on your decision and good luck with your house hack!

@Jeremy Jareckyj

Thank you sir! Yeah I think it's a unique opportunity to test waters in short term rentals or "mid-term" rentals with less risk. Since you're living in it, the worst case scenario is paying the full mortgage which hopefully you would be able to do anyway. 

Yes much more turnover with STR, so that is something to consider. The great thing is having these options and being able to test them or pivot if needed.

@Alecia Loveless

Thanks for sharing your experience. I agree, if you're doing a lot of renovations in the beginning, then you would hope many of those cap ex/maintenance issues wouldn't come up right away. However, I think its prudent to have some reserves being set aside on a regular basis. 

Also, if you do a great job placing tenants, then your maybe your real vacancy will be closer to 0. Good to factor in a percentage for vacancy, but the real number might be lower.  

It sounds like you have a solid foundation and will be prepared for any situations that arise. 

Good luck with your properties and future investing :)

@Scott Trench Suchhhh great points. 

I think you hit the nail on the head with the STR demand likely decreasing with supply and lower demand after COVID. Now there are these STRs completely decked out competing for the bookings against one another. I'm sure you have to upgrade more and more to get consistent bookings.

I would also agree that not as many people are willing to fly into the Smokies as opposed to flying into the Rockies or just going International. 

I am in the same boat, I would fly to Colorado before I would drive/fly to the Smokies.

Just my two cents. However, I don't have any skin in the game for mountain vacation rentals.

@Kai Kopsch Thank you!

I appreciate your input. You definitely have a track record of experience. I'm interested to see the demand moving forward as we navigate it for ourselves. So far, our first tenants have been phenomenal. I can only hope to have similar ones going forward. 

In the future, for other investments we may diversify to LTR as well, but I'll always analyze for MTR/STR too.

I'll continue to post our updates and progress along the way!

Hey gang!

I wanted to share my experience with my first house hack. 

When my wife and I bought our duplex, the rents were well below market ($950 & $1150). According to rentometer.com we could have reasonably expected to raise them to $1700 for 2BD/1BA after renovations. After running numbers, I decided to go the furnished rental route. There are a good amount of luxury apartments nearby, but I don't think any of them have the ability to be subleased. Many of the other nearby homes are larger, so I thought the demand would be high for a furnished 2BD. 

We got our first mid-term guest booked before our property even was finished. Haha. It was definitely a gamble, because I was assembling furniture up until the night before their check-in :o

 I only had an opportunity to advertise on FF, because it was the first place we posted and it got enough inquiries right away. In the future, after this guest I'll take the time to get professional photos and create listings for other places like Airbnb, Zillow, VRBO, etc. 

We locked in our first guest for $2,600/month, so that is already more than the previous LTR rates combined. Once, we move out of our unit, we have the flexibility to rent both as MTR or do a blend of other methods. 

If we decide to do STR (I think we will trial it), some of the best performing 2BD Airbnbs have average gross incomes of ~$49k/Year (~$4k/month).

IMO I think furnished rental house hacks have so much upside.

Is anyone else out there combining house hacking with furnished rentals? I'd love to hear your experience. 

-Ant

@Summer Dechanukul 

I'm so sorry this happened :/ 

Reading this was painful and it wasn't even my investment. Unfortunately, a lot of unexpected costs with potentially more down the line. Silver lining, EVEN MORE lessons learned. In the future, when you deal with any RE professionals make sure to properly "vet" them by reading reviews, conducting phone interviews, speaking to previous clients ,etc. If you do work with another agent, then I would look for an investor friendly agent with experience in these type of investments. A good place to start is here on BP or referrals from other successful investors in the community. 

I would piggyback off of what @JD said. If you sell at $120k then you're locking in a six figure loss. There is potential that you can finish the job, rent out, and recoup some or all of your investment in the future. 

I would do what @Theresa Harris mentioned. Try to set up a walk through with a building inspector to know exactly what needs to be done to pass, then get a scope of work with a contractor. If the contractor says it will truly only cost another $25-30k to get done then it might be worth it. If the contractor says it will be another $50-$100k, then that might be a different story. 

You also have to consider the ARV in your decisions. Is a completely renovated duplex in that area worth $350k-$400k or is it worth $225k. If the latter, then maybe investing another significant chunk might not be worth it.

This was just my quick thoughts. I hope it works out for you. I'd continue to post your questions on here and seek guidance from vetted professionals. 

-Ant

Hey @Christopher Morris,

I piggyback on some of the others, but I'd connect with a referred lender ASAP to go over your options/budget/pre-approval. Next step, connect with a investor friendly agent that will help scout out properties for you and/or connect with you others in the space with something off-market. A great agent can be such a valuable resource on your 1st property, because of all the nuances in RE transactions.

Just an FYI, 5% conventional for MF is an option now. My wife and I were able to close on a duplex in December with the FAnnie Mae 5% conventional loan. IMO I think it's better than FHA, because you don't need to persuade seller to take FHA and no lifetime PMI.

I hope this helps Christopher! 

-Ant, Fellow House Hacker

House hacking in Tampa?

I would say it is a similar premise to house hacking in other areas.

What is your strategy? rent by the room, rent by the unit (small MF), rent out an ADU, etc.

If you plan on renting by the room, then maybe more square footage and potential rooms to rent.

If it is small multi-family, then you can look at similar size rentals to see what their market rates are or use programs like Rentometer.com or BP rental rate calculator. 

Whichever strategy that you choose, run your numbers, and definitely consider all the other benefits of owning real estate i.e. appreciation, loan pay-down, potential housing expense decrease and/or cash flow. 

Good luck Cristopher!