All Forum Posts by: Katie Phillips

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $345,000
Cash invested: $20,000

I house hack by renting out 2 rooms in my 3bd., 2.5 bath house. I rent one for $925 and the other for $825, leaving me to pay $86 toward my mortgage and $300 in utilities for the master bedroom.

What made you interested in investing in this type of deal?

Rent prices in Sacramento, Ca can be very high, so I wanted to save money and not have to live in someone else's house. House hacking was a great option for me!

How did you find this deal and how did you negotiate it?

I bought the home from my sister and brother-in-law. We did not use a Realtor, so I was able to save 5% of the purchase price. You can easily download purchase agreements online. This is a great option if you trust the seller, but I wouldn't suggest it otherwise. It could be risky!

How did you finance this deal?

It is my first home, so I only had to put down 3% and had to bring in about $10,000 for closing costs/escrow. I went with a conventional, 30 year loan.

Lessons learned? Challenges?

Always talk to prospective tenants on the phone before giving them your address. You live there, so make sure you know who is coming over. It's a mistake I will not make again!

Do you have anyone in your network looking to buy? My parents invested by partnering with my sister and because she lives in the house, they only had to put down 5% and are able to get primary mortgage interest rates. She house hacks, and they make some money on the rent and appreciation. 

I personally use Rent Prep. They have a bunch of forms you can download, and I believe some are still free. They also offer background checks/credit checks and its all saved to your rent prep profile which makes it easy to organize. 

I also suggest meeting them in person and talking to them on the phone prior to inviting them over. I have made that mistake and had some people come over that I would have preferred they not know where I live haha 

Get a list of questions together and try to ask the prospective tenant before asking them to meet. Reach out if you have more questions! I can give you my list. Good luck! 

@Simran Singh I agree, a SFH will have better appreciation and potential for cash flow than a condo. Many of the newer neighborhoods in the Sacramento area can have very high HOAs and Mello Roos, which is not ideal for investors. Rancho Cordova could be a great option. The south side of 50 has a lot of new developments, which is increasing the value of surrounding neighborhoods. I personally live in Capital Village and I have seen amazing appreciation over the last year, and only expect it to grow. Rancho Cordova home prices are lower than Folsom, El Dorado Hills, Roseville, and Rocklin. Feel free to call me if you have any more questions. I'd be happy to share my tips on finding those unicorn renters! (530) 558-5640

@ Siddharth Mankikar I think you are on the right track with Rocklin/Roseville if it will work with your budget. The cash flow won't be as great as other areas such as Rancho and Citrus Heights. I would also look near the Pocket in Sacramento. There is a lot of construction going on, but housing prices are not nearly as high as other areas of Sac. Please reach out if you have any more questions. (530) 558-5640 

Thanks! I think I need to reach out to the county to be sure, but I’m hoping the regulation doesn’t exist is this area! 

Hi Brian, 

I am wondering if there are rules about renting out individuals rooms to unrelated people. For example, renting out a 6 bedroom house to 6 separate tenants, each on their own lease. I have heard some areas have zoning regulations about the number of unrelated people in one house, but I am having a hard time finding information for Sacramento county.

Does anyone know the zoning laws for the number of non-related people living in one house in Sacramento, CA?