All Forum Posts by: Ben Einspahr

@Jonathan Quesadilla you could have not said it better. "Cash flow is just the cherry on top". Ill DM you the details

Nope just signed lease as proof. Double check with a lender though

@Tyler Lyren Big congrats on the first house hack! Great question. Assuming you will be renting out as a long term rental (or possibly renting out each room), you will need to have signed lease that exceed PITI before vacating. That way your DTI does not go upside down. So if doing it right, your DTI should improve after each house hack is stabilized.

2 Tips: 

-Be sure you are keeping track of your rent collection to some capacity. 

- Show your lender your tax returns before they are filed. What and how much you are writing off can play a big role in your ability to buy your next house hack the following year.

I just recently put together a house hacking knowledge base that consists of all the FAQ's i receive daily. Happy to send the document over.

Hello BP community. Wanted to highlight the details of Eric DeNardo's first house hack purchase. Deal closed September 2022. Investment Details below! Great job Eric!

Investment Info:

Short Term Rental Style House Hack

Closed September of 2022.

Purchase Price:

$460,000

5% Int Rate

Cash Invested:

(Seller Concessions: $3,000 back at closing)

Closing Costs: $5k (Amazing grant program that offers down payment assistance)

Furnishings: $5,000

Rehab: $7,000

TOTAL: $17,000

What made you interested in investing in this type of deal and strategy?

Owning a future rental property for low down and decreasing my living expenses made house hacking a no brainer. After moving out, operating the entire property as a STR will pay for 100% of my mortgage, then sum. See spreadsheet below

How did you find the deal and did you or the agent need to do any negotiating?

Right off the MLS. I connected with the Envision Advisors Team and they set me up on searches to help me identify these house hack style homes with separate income suites. It took looking at the MLS just about every day to find the right one.

How did you finance the deal?

I used a grant program that offered down payment assistance of $17,000. This loan does require you to buy a home in a moderate or lower income area.

Did you add any value?

Yes. We replaced the roof, updated landscaping and new carpet.

Great Job Eric! Keep on crushing it!

 @Harish Pai Missing repairs, vacancy, HOA, PM, etc.
Would be more productive to discuss virtually.  Ill DM you

@Harish Pai $500/month HOA. Yikes! I am guessing you would need at least 30%- 35% down to make numbers work. Happy to share my analysis. I think there are better options out there that will give you higher ROI.

 @Jonathan Quesadilla Anything I post will just be compounding on what others have touched on. Lower the down payment, higher your ROI. Here is an example.

NOTE: Did not factor rental appreciation, property appreciation, inflation, etc. so don't beat me up on the numbers BP :) This is just to show the power of building HH stack and leveraging dept. Yes. You do not want to over leverage. That is why my rule of thumb is 6 months reserves for each rental. Again... this is just for example purposes!

Example 1= 5% down, 1 property ever other year for 6 years

$400k house hack

5% down plus closing costs= lets say all in for $25k

Move out after 24 months and purchase same house house same price. 

HH#1 cashflows $100/month

Do that again at year 4 and year 6

Avatar 1 now has 2 rentals and 1 house hack (future rental)

All in for $75k out of pocket and has 1.2M worth of RE that is appreciation at +/- 4% per year

Cashflow= $200/month total for property 1 and 2. Living in property 3

Example 2= 20% down on house hack. Live in for 6 years

$400k house hack

20% down plus closing costs= lets say all in for $85k

Avatar 2 lives in it for 6 years. Can not purchase next rental because all cash is tied up in HH#1. His mortgage is less but all he is doing is decreasing living expenses, not building wealth. Yes, you can do HELOC but not want to dive into the nuances

I would rather be Avatar 1 that leverages debt by purchase rentals consistently for low down vs tying up cash into 1 house hack at 20% down.

Backing in my answer with actual case study

I recently put together a case study of one our clients that has done this every year consistently since 2016 and is now on his 7 house hack. Numbers are pretty fascinating! Happy to send you the details.

@Harish Pai Welcome to BP and congrats on your first post. Are you sure these are not the condos in Northern Boulder that have "CITY OF BOULDER PERMANENTLY AFFORDABLE HOUSING" in the description.

 Here is a link to that page. Pretty confident there are rental restrictions on these.

@steve could you provide any insight on this?

@Fareha Zeb

1.can get in for low down

2.hands on land lord experience

3.decreased living expenses

4. excellent ROI on the 5% down. (+80% ROI)

5. Live and flip options

... to name a few

@Carrie Brauninger sounds like you will be able to find the best of both worlds. Find a house hack that will give you the privacy you are looking for + decreased living expenses at the same time turning into a future rental 12-24 months does the road. First property in your house hack stack!