All Forum Posts by: Jeff Schemmel

 this is right, and you'll waste more time waiting and trying to find one than it's worth in lost appreciation.  It's often not in a seller's best interest to sell this way, I don't see it happening until the market shifts far more into the buyer's control.  maybe it'll happen, but you'll be waiting and waiting for this.

 well, I wouldn't rule it out solely on not having to pay for a residence.  Hear me out :)  These are a few of the benefits i've experienced while house hacking that I think may be on par or even exceed the benefit of cost of living reduction:

1.) I learned how to be a landlord while I had more control living in the property.  This includes tenant management, screening, etc.  I could never imagine just blindly paying someone to do this for me had I not learned how to do it myself.  Being there was just so much easier, as I could tackle issues before they were bigger problems and learn what I need to pay attention to.
2.) I get to benefit from the 2/5 rule.  Live there for 2 of the last 5 and if you decide to sell you don't pay capital gains.
3.) This is probably the best one...I could force equity by making improvements while I live there.  this is where I probably earned most of my money in my first two househacks.
4.) This is pretty specific to me, but, I was able to share that I house hack with other people I work with and that helped me establish rapport with other investors and clients I work with today.
5.) as an owner-occupant, I got great loan terms and got to purchase a more valuable asset because I got credit for the rent as qualifying income.  This is a pretty insane benefit.  I also got access to really low % down payment options because i was living there.  This could be huge for you, given your high cost market being a barrier to entry.

Hope this helps.  I think it's pretty important to learn how to manage a property and tenants yourself before you hire a PM or try to do it when you're not there to see it and be around it and really get to know your property while you're new to the game.  If you're not into it, it is what it is and that's obviously a very personal choice!  

@Jeffrey Swanson James kind of eluded to this, but I think it's absolutely necessary to have multiple strategies in play for a deal to be a deal.  Section 8, 4D program, etc. can and does work for quite a few local landlords, but to rely on it exclusively can bite you later - like anything.  There are always downsides.  With section 8 you can expect things to work a little slower than if it was just between you and tenant, which will make you less agile as a property owner looking to make sure you fill a vacancy and get the right amount of rent at the right time.  I've started to see more investors look to short-term rentals and furnished rentals - which come with their own risks and requirements - much more than I have investors running to sign up for Section 8 inspections.  

focus on finding a deal that works with a few strategies.  Try to buy in an area that has a hospital, a longstanding business that you'd buy stock in providing employment, and/or a great school district and I think you'll find that things work themselves out.  There are so many ways people are willing to pay to rent a property nowadays, I don't see a good reason to stick to one strategy.

hope this helps, reach out anytime.

@Levi Backman Paul is giving good direction, here.  Househacking is the way to go.  My first househack was a single family home I lived in and rented to a friend for $500/m.  My second property came a few years later out of the proceeds from the sale of that house and I now collect $1,500/m from the upper unit of my duplex.  In my first house hack, my cost of living was around $500 per month after collecting that rent, and now in this one it's $300.  When I move out and rent it I'll cash flow ~$600/m after expenses.  The cost of living reduction is so huge.  imagine having a property that cash flows 400/m but you're paying 1500/m in market rent, haha.  it's just not even in the same ballpark.  owner-occupants get much better financing options and terms, and if you live in a property 2 of the last 5 years you can sell with no capital gains on the part you lived in.  Just some food for thought :)  good luck!

@Joseph Porter I've always been a huge fan of Craig Curelop's "the house hacking strategy".  For some reason I can't link him here, but he's a former BP employee and has househacked several times in the Denver, CO area and wrote what I consider to be the best househacking book a new investor can read.  He's done lots of podcast interviews and such too.  you can find him online @thefiguy as well if you're a social media guy.  anyway, reading is part of it, but get to meetups asap and learn what investors are doing out there.  My brother used to live in Clarksville and he and I discussed buying there to rent to people that work on the base at Fort Cambell.  I don't know the merit of that locally, but something to consider.

Hey @Kyle Hjelmstad welcome!

 I'm not saying anything other than to check with the lender about what's possible if there are extra seller credits available.  

I think it's most likely the buyer should get an appliance or a home warranty out of the deal as part of the agreement.  If underwriting is already saying the seller credits are capped at 2%, it is what it is.  I have not heard of 2% being a cap for "investment properties", that seems strange to me but I dont' claim to have seen it all.  @Tim Swierczek have you?

@Nate Slappey III the best thing I do as an investor and investor-friendly realtor is to just build connections and help other people/investors out and treat that as my JOB.  I take every opportunity to connect with new people, I tell everyone what I do, and I go to every meetup and dinner and beer dabbler and whatever that I can fit in.  I still do that as much as possible to network with my sphere and keep growing it.  I invest myself, and naturally, I try to do as many favors for other investors and clients as I can.  I like to do those activities and favors, but they have a natural side-effect of building "social equity".  Over time, I become the first phone call for people who know they can depend on me and who know I get deals done - they know I have a buyer or a seller.  That's as complicated as it has to be for me, as I'm not trying to be some kind of mogul and build an empire and I have clients who need deals and want to grow their businesses. 

I see people making bland social media posts like "looking for a deal", or "looking for off-market". Honestly, if you find one that way there's more than likely a reason it's not already spoken for. People work with others they know, like, and trust. All that said, you also are more likely to have to create a deal these days. A lot of MLS listings look pretty mediocre or even bad on paper, but over time, and with some work, they can cash flow and be a more attractive rental. I had to give one of my units a full facelift and knock out a wall to get the rent to the proper place, but there were tenants in there at below-market rent I had to be patient with first, and it took me a year to do that. now it's a 1% property and probably the nicest duplex in the neighborhood, but it didn't look that way originally.

Minneapolis and Saint Paul, here :)

@John Woodrich is probably more qualified to answer a question like this than I am :)  Good luck!