All Forum Posts by: Keenan Cromshaw

Welcome to the community! House hacking is a great way to start off in real estate investing and one of the least risky ways as well. Another good step would be connecting with local investors and/or investor friendly agents to help you identify and run numbers on potential house hacks, you can find these at local meetups and I would look at facebook as well. 

I generally recommend house hacking when looking to get into real estate investing to get a feel for homeownership (and its tribulations) along with understanding the process of buying and managing a home. It is also generally lower risk as compared to flipping, buying a rental property, BRRRRing, etc. 

In the meantime, I would comb your local market's investor facebook page to find investor deals and get into the habit of analyzing deals and then running it by a trusted investor or agent. If you are looking for house hacks, I would look on zillow or redfin for the homes themselves and then look on facebook marketplace, furnished finder, airbnb, etc. to see what rooms are renting out for per bedroom in your area. From there, you can get a good idea of how much cash flow you would have. Since real estate can be more risky as compared to just putting your money into stocks, I personally generally aim for 10-15% annual cash on cash returns for my longer term investments (not counting appreciation). So if I paid $50k in closing/down payment, then I would be looking to get around $5-7500/yr or $4-600/mo. 

Regardless, I think the best thing to do would be finding a mentor and/or agent that is familiar with investing. There are so many avenues you can pursue with real estate and having someone knowledgeable who can help guide you is going to be integral to your success.

Hope that helps give you some guidance and I wish you the best of luck!

It all depends on your area, but I found the most success with zillow and facebook marketplace/groups. You can try apartments.com or craigslist but zillow and facebook are definitely the most important. Make sure you take good pictures (even professional) and you are clear in your description so it doesn't look like a scam. Also try posting in facebook groups that are about renting, subletting, etc. and you can get some good traffic from them along with marketplace. 

When do you think it makes more sense to hire a handyman instead of a general contractor? 

Would you rather save money with small fixes or invest in a GC for a full renovation done by the book?

Or do you usually like to do a combination of both?

That is very dependent on the area you are in. You should connect with an agent that would have a better idea of what the new construction price per sqft would be in your area, since there is so much variability. You can also use redfin or zillow and filter new constructions and it will calculate the sale cost/sqft. In my area, they usually range from $200/sqft or higher

I would start by going to real estate networking events in your area to find wholesalers and investor friendly agents that are networked with wholesalers. Also, facebook is a great resource for finding off market properties. I am sure MA has plenty of them

How experienced are you in doing deals yourself? If you are uncomfortable/inexperienced with any step of the process so far (including offers), I would definitely recommend either talking to an experienced investor or agent that will help you. 

Is the 3% going to kill the deal? If not, it's generally worth having the advice and expertise of someone versed in offers/transactions to help prevent mistakes that could cost you a lot more than that.  The fact that you are asking makes me think it would be best for you to hire someone to help, in all of my deals I have found (relative) peace of mind to be worth a little bit less profit. 

Welcome! 

A few things to help guide your investment strategy: 

How much cash you are willing to spend/have on hand? This is probably the biggest factor. If you don't have much, I would research wholesaling and/or getting a partner to make up the gap if you want to flip or rent out properties. 

Your credit score, monthly income, and debts? This will affect financing and interest rates, even for flips and rental properties, not just your primary residence. 

Your risk tolerance? House hacking is typically the "safest" investment strategy to start out but still carries risk.

There are a myriad of other factors but I would recommend networking with local investors to get a feel for what would be best. Hope that helps!

I would also add to connect with investor friendly agents who are ALSO investors as they typically have an eye out for good vs bad deals and already have the connections, especially when it comes to lenders. Network, network, network! Whether that be investor meetups, facebook groups, or even local entrepreneur groups, it will significantly expand your network!

I agree with Nicholas, there are a lot of considerations and preferences when considering cash flow. 

I generally  want to beat the stock market considering the risks associated with real estate, so giving an average of 7% appreciation of the broad U.S. stock market, I would like to reach at least 10-15% return on the cash that I invest, maybe even more (this is all assuming I am in an appreciating market). That is just my personal preference, however. 

I would talk to local property management companies and see what they say as well. I used to have an Airbnb near downtown San Antonio and would get inquiries from travel nurses and military members a decent amount, but I was also relatively close to JBSA and a few major hospitals. The healthcare traveling industry is also nowhere near its peak, so I would do some thorough research about rental rates, vacancy rates, surrounding hospitals and/or bases to see about who would potentially rent from you. (and look up comps on furnished finder and facebook marketplace). 

Also you must ask, how long will the extra cash flow take to recoup the furnishing cost? It took at least $5k to furnish my 3/2.5 1500sqft home, so it would take $400 extra/month to just break even in a year. Hope that helps!