All Forum Posts by: Daniel Haberkost

@Tyler Kress I want to second @john Warren in that there is not necessarily a right answer.

House hacking was/is especially interesting to me because it eliminates my monthly housing costs. How much freedom would it give you if you were able to live for free? For me, that offered significant opportunities that I wouldn’t have been able to pursue if I wasn’t living with such low overhead.

I don’t think of real estate and equities as being comparable. I invest in real estate because it’s a flexible asset allowing me to generate a substantial return with added effort and creativity. If I wanted slow and steady passive returns then I’d put money in stocks.

It’s entirely dependent on you and your situation.

@Kimberly Best that’s a good first step, how’s your agent ? Are they an investor ? Having a strong team is especially important for your first purchase.

@Kimberly Best if you put in an offer contingent on inspection then you should be able to renegotiate or back out if need be.

Based on your numbers I’m guessing you’re somewhere in the midwest? Properties can be bought extremely cheaply but are often 80-100 years old and will have much higher cap ex/repairs and maintenance so budget appropriately. It sounds like they incurred a significant capital expense so id ask about

It.

Also, make sure you find a good inspector! See if you can find one used by other investors who you can trust.

I do but they're local to Colorado, call around, I'm sure you can find one if you call enough people.

On a side note, be very careful leveraging to such an extreme degree. If you have no cash on hand and no partners with cash you're taking substantial risk. You need to have contingency plans and extra capital for when things go wrong.

All too often, new investors with no money are the ones who want to leverage to a high degree when, in actuality, it's generally something you should only do if you have a healthy amount of liquid capital. 

 Real estate investing requires liquid cash.

@Victor Chen I've only been in the business about 2.5 years, yet RE investing has already given me complete control over my time. 

It's a flexible asset class that allows you to multiply your capital exponentially if you're willing to put in effort, take the time to learn and get uncomfortable. That's not something I can do with stocks/bonds. Additionally, it's more esoteric than many other asset classes which allows for mispricings to come about more often if you're willing to look for them. There isn't a ticker updating minute-by-minute the way there is with equities. 

Investing aside, there are also quite a few ways to make a substantial income through real estate. Whether it's flipping a house, development, etc the flexibility of the asset allows for a multitude of ways to generate cash. 

On the less pragmatic side of things, I have fun working with other real estate investors too as they tend to have a very consistent personality type that I get along with quite well. 

Yes, there are hard money lenders who will lend up to 100% of money needed to BRRRR as a % of the total ARV. Simply put, you have to find a very good deal to make it work. 

It's also viable if you have solid rapport/trust with a private investor but that's not likely as it sounds like you're just starting. Start calling hard money lenders, there are plenty listed here on BP.  

@Account Closed I don't have any insight into your market but I've been house hacking for several years and I wanted to comment on "I realize I will probably have to scale back my lifestyle/comfort a bit".

This is what everyone assumes and it's really not the case at all. I live in a 4/3 and rent all 3 extra rooms. One tenant works nights and I never see him, one tenant is shy and plays video games in his room or is gone and the 3rd dogsits for weeks at a time (i.e. she sleeps at the owner's house) so I rarely see her either. I often feel like I live alone. My house cash flows while I live in it and there's little to no sacrifice/inconvenience. I know others that have a similar setup and you could do the same. 

@Nicholas Chrisman I think if you’ve prepared properly (I.e. educated yourself), are buying from a strong financial position and buy a deal where the numbers work then you shouldn’t have to ask anyone whether to do it or not.

I was in the middle of a BRRRR when the pandemic hit. I filled it with a tenant at $175 more a month than expected and refinanced as planned. If you run your numbers conservatively and buy right, I wouldn't worry.

The experienced investors I know are continuing their business as usual. Keep cash reserves on hand, buy at a discount and avoid over leveraging.

@Jakayi Parker I would still run the numbers and make an offer. This sounds a lot like the last seller we bought from. He was very experienced but his time meant everything and money was of little importance to him anymore. He played it cool like your guy is doing but wanted to offload the properties without appraisals/inspections/realtors/etc.

I could be wrong but worth making a quick offer at least.

@DuBeaux Dingle I like to be ready to go by the time my phone starts ringing so I usually get up around 5, read/workout and then begin working by 6:30 or 7. Usually i stop working around 5 or 6 to spend time with family/friends but depends what projects I have going on.

I find it very important to plan my days by time blocking, helps me stay on track.