All Forum Posts by: Daniel Haberkost

@Colten Powell

Reminds me quite a bit of the situation I was in not too long ago. I chose to finish school (I paid for it) and worked 50 hour weeks while going to school full time.

The irony was, because I applied myself at my job I was making $70k plus had all my transportation costs covered before I even graduated. I learned quite a bit from my job, but very little from my “education”. I graduated with a double major (business administration/management & leadership) and I’ll tell you the courses I took were borderline useless. The job I had (managing others) was very instructive.

Looking back on it I wish I had not finished school and that I had used that money to start investing earlier. I would be so much further ahead if I had. Education is absolutely invaluable, but with the availability of information in today’s world you can learn (almost) anything you want if you apply yourself. Also, (based on the schools I was at) colleges tend to be extremely isolated and insular and their courses are grounded in theory and idealism, not reality.

Now, you need to ask yourself whether you want to quit school because it’s hard to go while working simultaneously or if it’s genuinely because you want to pursue entrepreneurial ventures. If you’re really going to use the extra time to work and pursue your business goals then I (personally) would not finish.

That’s my $.02

-Dan

@Walker Noon

I had a very good experience renting to my friends down here in The Springs. The key was that I was VERY upfront with them that this is my business and they would be treated like any other tenant.

Also, who are the friends you’re renting to? Do they have solid incomes and are they responsible? The ones I rented to were which is a big part of why I was okay with it.

The point is, if you’re going to rent to friends you need to set the same standards and expectations you would for anyone else!

-Dan

@Alex Diaz

So if you're doing a BRRRR then the property is likely going to be in pretty rough shape. If that's the case then you won't be able to get traditional financing on the property and will need your private lender to fund the initial acquisition. Then once it's fixed up and a tenant is in place you can refinance into the traditional 30 year mortgage.

Okay, @Alex Diaz with the BRRRR strategy it's a great idea to talk to traditional lenders ahead of time so you know for sure that you will be able to refinance out of the more expensive, short-term money. I would definitely review your finances with a lender to be sure you know exactly how much you will qualify for.

Have you figured out what you're going to do for the short-term loan? 

@Alex Diaz What's your strategy? Are you house-hacking? Buying a property with a traditional investment loan? 

@Kenny Berrios I'm not sure where you're located so I have no idea what your market looks like, but generally it's easy (especially in this stage of the cycle) to find the money once you have found a deal. This is especially true if you're in a hot market. Here in CO Springs finding money is extremely easy but the competition for deals is significant. 

Hey @Mariah Destruel, I don't know what your personal situation is like but is house hacking an option for you? 

I'm just south of Denver in CO Springs and all along the Front Range there is a lack of affordable housing so finding tenants to rent out rooms is very easy and you can get premium rents. That way, you could live where you want, eliminate your housing expense (likely have cash flow every month if you buy the right house), use the first time home buyer programs to your advantage, and begin your investing career. 

Just an idea!

-Dan

Hey @Leche Hopkins what exactly is your strategy? You said both homes were in very poor condition so are you looking for a BRRRR? Or a flip? Also, have you done any deals as of now or will this be your first?

Knowing where you're at and what your goals/strategy is will help myself and others answer your question. 

-Dan

@Ben Feder

Hmmm, what makes you want to start with a large complex ? Do you have a background in managing them or something along those lines?

And yes, I left my W2 job early this year so unfortunately the bank will not consider the income I’m generating from my business when I apply for a loan. To solve the problem I found a relative with a solid debt-income ratio to co-sign for me. This will allow me to purchase another house-hack even though I will not qualify alone.

@Ben Feder

The mortgage includes interest, taxes, & insurance. I’ve not had any vacancy, in fact, I’ve had negative vacancy. The last two tenants that left paid for a month, left before the end of the month, and I filled the room before the month was over so I actually had double rent for the last week or two.

I’m talking about a house-hack, not a traditional rental, so the most substantial value is in the thousands I’m saving in rent if I wasn’t in the house. To rent a comparable home in the neighborhood I’m in is around the $2000 mark.

Everything was newly updated in the house so I’ve had no cap ex (and shouldn’t for years to come) and I’ve spent less than $100 in maintenance in the last year.

I pay the utilities which were about $120 in the summer and $220 in the winter bringing the average to $170.