All Forum Posts by: Jeff Schemmel

Hey @James McLachlan good morning!  

Your head is in the right place, my friend!  House hacking is one of the best ways to start.  My first house hack was a condo, my 2nd a duplex, and my 3rd will probably be another duplex in my neighborhood.  

My advice is, at this moment, focus on getting a great career established.  Make your first deal your own, no partnerships, and keep it simple.  House hacking is about learning much more than it is about hardcore penny-pinching (it's still about that, though).  You're learning to be a homeowner, property manager, handyman...learning how to manage your property like a business, how to talk to tenants, etc.  You'll learn how to screen tenants and how to collect rent the right way, and what to do if there's something wrong.  

I hit on my take on partnerships, but I'll give you some thoughts on private money.  No hard money lender is going to lend to someone who hasn't managed property or gotten through a flip or brrr successfully - unless they know you or your family in some circumstances or you've got an insanely detailed plan and good mentorship.  But being brutally honest, it's just not likely to happen.  Your first deal should come from your pocket and should utilize the best low-down loan option you have available to you.

You're not likely to get pre-approved on a part-time job with variable hours to the extent you'll be allowed to buy a duplex, however, it may be possible to get a townhome or a condo to start the equity ball rolling provided you've got a good stable job and 2 years of consistent employment.  Few college students have that, so I'd recommend hitting up some awesome local lenders to give you some quick guidance so you can start making the right decisions now and set yourself up!  It may be possible with a co-signer! 

You don't just have to wait, though.  You can do what I just recommended now and see what is possible, and you can go to the meetups and start networking now - that's easy!  Hit me up and I can make a few recommendations on lenders and meetups.  If you're interested in hearing more about how I did it I'm happy to get coffee anytime - that story is too long for the post :)

Fear is natural, man.  Buying investment properties isn't for people who want to be comfortable, but it is challenging in awesome ways.  Get to the meetups, go to see some projects other investors have worked on and make it super real for yourself.  Make friends and GET HYPED!  You're going to doubt yourself the longer you stay in your own head - everyone struggles with that.  The way to break that internal self-doubt and fear cycle is to just go do it and surround yourself with people who do.  You will thank yourself later!

@Jordan Moorhead is right.  I house hacked a condo my first two years and sold it (i regret this selling part).  here is a summary of the numbers and why it's a no-brainer to buy in my opinion.  The hurdle you need to decide to jump over is whether you'd like to be a landlord or not after house hacking - paying a PM after you move out is always an option and you can build that into your deal analysis but it's kinda expensive, in my opinion, and I'm biased about self-managing for the experience; I believe in it until a certain number of units.  I also believe that if you haven't self-managed, you don't know if you're hiring a good PM or if they're doing a good job for what you're paying them.

first househack example:

Paid 130k for a 2 bed 2 bath condo in Apple Valley.  rented 2nd room to friend for $500/m, paid $500/m for the remainder of the mortgage for exactly 24 months.  Rent for 2b/2b condo in that area in 2016 was ~$1,200.  (already saving 700)

Sold 24 months later, net ~18k.  That's $750/m in my pocket - capital gains free.  So let's offset the 500 I paid per month to live there with the 750/m in gains for modest appreciation those two years 2016-2018.  that's a net gain of 250/m in total, and another $1,200/m for not having to pay someone else :) $1,450/m total gain for a total of $34,800 cash over those 2 years I saved and could invest in another asset or my lifestyle.

I could talk your head off about all the ways you could house hack.  Hit me up if you want to get a coffee/beer and I'm happy to introduce you to some investor-friendly local lenders who can give you options if you get serious.

I recently spoke to my broker about this. She recently had a deal under-appraise by 60k due to the ADU not being licensed. the Appraiser's argument was "well it's not licensed, it can't be used as an ADU." That said, he discounted the finished sqft to reflect the adjustment.

I am not saying you will have this issue, I'm not sure if there are event short-term rental licensing requirements in your area, but I would consider getting that done prior to appraisal if you could.

Hey @John Santiago good morning!  I house hack a duplex in Saint Paul and I'm happy to provide my perspective.  Reach out anytime if you have questions about my advice or others you think I could answer for you.

Here are some tips from myself as a house hacker:
1.) Link up with an excellent local lender ASAP.  They will help you know what lending options you have.  Those are the "tools" in your toolbelt, and any local lender who's also an investor is going to be able to guide you on which one is smart for which deal or sequence.
2.) Start practicing your deal analysis.  I prefer to make my own calculator.  The numbers for your deal must be your numbers and you've got to build the muscle memory needed to know a deal when you see one.  You should practice several deal analysis each day and get to the point where you can see a home priced in a certain neighborhood and quickly deduce whether it's worth attention.
3.) Find a realtor partner who is also an investor who can guide you as a first time home buyer and investor.  Hit the streets and make it real by getting into properties and talking about deals.
4.) Go to meetups and meet other investors to hear about different house hacking strategies.  If you can, decide whether you're willing to rent by the room.  if you are, the return is MUCH better than if you're not.  You have to be OK with someone eating your chips and not take it personally ;) 
5.) Read "the house hacking strategy" by Craig Curelop, and "the book on managing rental properties" by Brandon and Heather Turner.  between those two, you'll be more equipped as an owner-occupant of a rental property.

Hey @Matthew Comella, are you interested in renting that property by the room, living there, and/or flipping it while you live in it?  There are a ton of creative or staple ways to invest, just curious what your goal was for this one.  I'm always open to chat and connect.  I think your budget is plenty realistic, you can find great single family homes in that budget.  The nice ones, however, are going in 1 or 2 days on market in 10+ multiple offers at the moment.  There are always the few that need some work that sit longer, but in my opinion if you're looking to live-in flip, most families will skip over or just not even look at something you'd be interested in so you may have an easier time.  let me know if I can help, and good luck!

Hey, man!  welcome.  I can help provide insight, knowledge, experience, perspective on house hacking and being a first-time landlord!  Let me know if you'd like to connect.  Meetups are your best friend, there are plenty of good ones, I'm happy to send a list.  @Tim Swierczek is a lending master, it's great to connect with a lender experienced in investing early to know where you stand and what tools are in your toolbox.  I'm turning over the upper unit of my duplex this month, and BP prepared me in a lot of ways to be able to feel confident doing that; from connections, to advice, to move-out checklists, to lease creating and tenant management.  It's all here!

good luck!

Hey @Goanar Mar!  I recall connecting with you earlier this year, and you certainly have the tenacity to do anything you want in this business.  That said, as an investor-friendly agent myself, the best thing you can do is walk the talk.  Getting licensed is great, and you will learn a lot, partnering with the best broker and having a coach/mentor in the business is perhaps the most important thing after getting that license and passing the exam.  You need support, and the exam doesn't prepare you for writing your first purchase agreement, how to properly show an investment property, or how to coach clients through the process.  Having done it yourself is a pretty important step in being able to coach anyone how it's done for them.  You will find all of this easier if you have explored the neighborhoods, you have muscle memory enough to spot a deal when you see it, and you have made some connections with great lenders, contractors, etc. to aid your clients before, during, and after transactions.  As always, my phone is on and my door open for you my friend :)  Good luck!

Welcome, @Connor Cornell I think you're right on, connecting with the local investors, agents, contractors, lenders, etc will help make it more real for you. I'm always excited to share what my experiences have been in REI. I house-hack here in MSP since ~2016 and I'm happy to meet up or do a zoom call to pass my knowledge on to you. @Jordan Moorhead nailed it with the recommendation for meetups, those are happening in person now, and some of the best ones happen at someone's flip, househack, etc.  Getting familiar with strategies, deal finding, deal analysis, and what it means to be a landlord can be learned from those of us who have lived it :).  Reach out anytime!