All Forum Posts by: Ben Einspahr

@Dan Maez, I am giving 2 thumbs up to @Kevin Sobilo post. The avatar he is referring to is someone that is in it for the long haul and not concerned about immediate cashflow but portfolio and wealth growth. 

Here is my general rule of thumb when deciding whether to sell, keep, or trade up:
ROE- greater than 10%. That roughly the average return you could get if that capital was in the stock market. Your real estate investments should out preform the stock market.

CAP Rate- greater than 5%

LTV- greater than 50%

If they fail to meet any one of those, consider selling.

So, my suggestion is to start by looking at how each of your properties are preforming individually. Then next as a whole. Then identify what your goals are in 5 -10 years. What moves can you make now to get you there? This is why I love REI. Its like a game of chess once you start building a portfolio.

Ill DM you some case studies and spreadsheets I created specifically for this b/c it is a very common situation investors are running into.

@Paul Kim Already some excellent posts in here to provide you feedback to make the best decision for you. Props to you for living in the smaller bedroom with shared bath. Great mindset. 

My 2 cents. For renting individual rooms. MTRs typically is not worth the squeeze. For all of the extra work you have to put in, the additional $100-$200/ month over traditional unfurnished LTR is not worth it. 

@Dylan J Berget happy to help you out here! Ill DM you some referrals we work closely with!

@Josh Humbert great throwback to an older forums post. Lots has changed since then. 

I would not look back at the past 5 years forecasting the outcome of a future house hack/ rental property purchased today. We have gone through crazy appreciation rent growth. I do not anticipate that in the next 5 years. 

To answer your question, the property will most likely not cashflow while living there (very difficult but can be done). But.. the property should after moving out in 12-24 months and turning it into a stabilized rental property. 

I will DM you some recent case studies of former clients for context. 

@Garret Burlas Welcome to BP! Great job on the first post reaching out to network. This is also a great location to locate meet ups in your local market. I'll DM you so we can connect offline.

@Ann Mclean There are many advantages to allowing pets in your MTR, but sounds like you are well aware of the disadvantages. From my personal experience, here are a few:

- Navigating ESA and Service Animals. Understanding the do's and don'ts for Denver.

- If you rent on a platform like Airbnb, you will have to take off auto booking if you have specific restrictions (pet type, size, breed, ect.) on pets. Essentially airbnb only has a yes or no if you allow pets. 

-Allegories for future guest. Carpet is not the best for pet friendly rentals.... but can be done. If you do have carpet, it should be shampooed. That requires about a day for it dry. Will not be able to have check in, check out on same day. 

-The obvious, additional wear and tear.

But.. with every challenge is a solution!

In all, I am lucky to say me experience with pets is MTRs has been good. Notice how I did not say STR :)

My answer, do not allow pets until you have your process + systems in place. 

@Jacob Munson as everyone has already mentioned, depends on your long term goals. I will start off by saying, your first line of defense is a good insurance policy. 

If you do plan on getting multiple properties in CA, then an LLC would be worth it.

2 things that often get overlooked that was not mentioned:

1. Call your insurance (of the investment property) add your LLC as additionally insured.

2. CA might be different but... your business address must be in the same state your business is conducted. This can be challenging b/c you can not make your rental property your business address.

@Jeff White and I just wrapped up a case study call "should i put my house hack into an LLC" I'll DM you the details.

@Sam Hatch rent by the room house hacking is an excellent investment strategy for someone like yourself. As you can tell, getting the numbers to pencil out is not as easy as it used to be. Here are a few tips I can provide that help make rent by the room house hacking in Denver work:

-Must be 4+ bed and 3+ bath. rooms with shared bath will typically rent for 100ish less per month (must have plenty of parking)

-Look for 2,200 sqft or greater. WIth this you can typically convert 4 bed home into 5 bed for low cost

-Look for home with some form of additional kitchenette or walk out basement. 

-When marketing, do not include utilities in rent. Utilities will be billed back at flat rate per month. This way you are able to get the same per month but market for less.

Will follow up with some additional resources (websites to rent, tenant screening, etc) we have to get you headed in the right direction. Rent by the room is our jam! 

@Sean Link. I think the additional costs could be worth it. If you find a house that makes since and fits your buy box but the properties just has one of those skinny 1 car driveways, adding a wider driveway could be a good ROI. Especially if you are looking to accommodate 5+ tenants.
You have 2 options:
1) Bite the bullet and pay for it all upfront so it is done with. Concrete is your best long term option... and will look the best. 

2) If you have tight upfront capital, install a temp gravel driveway. This will work for about 4ish years. I have one at my old HH and that was the typical lifespan. Guessing it will be about half the cost.

I have some local recommendations if needed

@David Yee, some advise for decreasing that building costs of the ADU:

-Decrease the sqft. I have heard that an 800sqft ADU can cost almost double than a 500 sqft ADU. 800 sqft ADU will not bring in double the income a 500 sqft ADU will

-What does the shape look like? Keeping it very simple and square will decrease your costs as well. Every additional angle adds cost

-Good rule of thumb. Aim for same price per sqft as your current home value.

I know this did not directly answer your question but hope that it helps point you in the right direction.Ill DM some more resources. 

Best of luck