All Forum Posts by: Erik R Aho

Couldn't agree more! My husband and I househacked our apartment in Boston when we moved to NH during the pandemic and BRRR'd our second property (which balance a bit and hold/ STR). We just bought a 3/1 in Harwich, MA (where my husband is from) and are house hacking on that property now. A lot of the posts make two really good points: (1) a lot of people are trying to sell their services to newbies, which is completely understandable but can be a train wreck (I almost made a bad choice in 2022 when I was a newbie on the site and trying to get my feet wet). Be open to learning but balance that with a healthy dose of skepticism and your own research/ edification. (2) househacking is the perfect first step. You can get in the market with less money, could have more time to do a Reno/ make updates and force appreciation, and someone else is helping cover your mortgage.

Growing up my dad would ask me “how do you eat an elephant?”  The answer, “one bite at a time.”

Getting into REI is no different for the majority of people who do it. Start with what you can manage, be honest with yourself about the risk you are comfortable with, and go slow.

Good luck and feel free to reach out with any questions! 



 

@Erik R Aho

Congrats on saving that much being so young!!! Such an awesome place to be. 

I'm bias, but house hacking is the absolute best way to get started in my opinion. You've built something up to the point where you don't want to lose it, and house hacking is a phenomenal entry point with incredible tax benefits. 

I've house hacked twice in Reno, NV and it's already changed my life. 

Completely agree w/ @Nicholas L.

@Erik R Aho

start with a house hack.  period.  and remember that a house hack is about building long term wealth, not about cash flowing.  you will likely still have to come out of pocket on your mortgage payment, which is fine.

please do not buy a random property thousands of miles away in a market you don't know anything about because someone on the Internet told you to.  this thread perfectly illustrates the reality of cash flow in the first few years, which is this: there isn't any.  in any market.

https://www.biggerpockets.com/forums/12/topics/1171104-the-m...

I own 3 SFR as investments in Columbia MO, along with my 4th primary SFR in KCMO. two of the 3 investments have been gutted and rehabbed. I Bought a dental practice with my wife 2 years ago, so once we are no longer poor from that, plan is to convert 3rd property into a STR. Then plan is to merge some City lots I own in Columbia MO and build new construction triplex.

Then my plan is to begin investing in my local market of KCMO. For now though, I just assist local and OOS investors underwrite deals, and act as boots on the ground for my OOS investors. I am well versed in laws pertaining to STR regulations, which are extensive in my market.

I'd start with househacking. If you plan on being in the area for awhile it's the best way to become a landlord. I'd also get creative on the rental strategy. Look into rent by the room, MTR, or STR to see if any of those work in your area.

 I too am originally from LI . I started buying rentals in the OH markets about 10 years ago, great double digit net caps, 25- 30% NETS back then. I now live in FL and do all my biz in OH, still getting 15- 20% nets. I just locked up a duplex rented for 19k a year, all in 80k. SF all in 70k, rented for 1300 sec 8, Much better than LI. 

Erik, I'm big on investing in Detroit right now. I have 12-doors there personally and it's a great cash flow market with tons of BRRRR potential.

That said, given your age, are you sure this is the right path for you currently? I'd be looking in your own market (assuming you don't already own a primary) and finding something you can buy and live in that will appreciate aggressively. 

Everyone here will try and sell you something based on what you're describing. And I'm happy to talk about Detroit if you really are adamant about buying cash flowing rentals today. 

But I'd consider the alternative too.

1. Whatever allowed you to have $105k at 20, do more of that. Your primary focus right now should be maximizing your income and keeping expenses low. 

2. House hack in your appreciating market and forget the idea of cash flow hundreds of miles away. We all chase cash flow in the beginning only to own something long enough to watch it go up $100k+ in value. Once that happens, you figure out that cash flow can't touch appreciation. And the long term cash flow in appreciating markets is better bc the rents increase exponentially faster than in stagnant, cheap markets. Ask yourself, "Which property would I rather own in 10 years?" and let that guide your decision.

3. All of this is harder and takes longer than strangers on the internet make it seem. It's a long game. Slow and steady still wins the race. 

@Erik R Aho, you'll need to leverage debt. As noted above, a non-QM loan product such as DSCR could be suitable if you don't have a W2 track record. However, before you do anything or speak with anyone, read "Long-Distance Real Estate Investing" by David Greene. I suppose house hacking isn't an option for you at this time? Everyone on this site will be pitching their markets. Make sure to verify all information and ideally speak with an experienced investor who acquires in the respective state before proceeding.