All Forum Posts by: Laura Shinkle

A certain amount this is honestly to be expected. Not all people are good roommates (which is essentially what they are). Set expectations up front and in the contract. Make sure you document the condition of the house/room in the contract so if/when things are damaged it can't be a he said/she said type of situation. Upfront communication solves most problems. And remember, it's a mid term rental, so when you do get a crappy one, they'll be gone soon lol. 

I'd also make sure that you have set standards for everyone BEFORE you start screening tenants. No one gets special treatment of exceptions. That helps give you a system and takes some of the doubt/angst when accepting a tenant. Whether you're living in the property or not. It'll also eliminate friction if one finds out a roommate is getting something that they're not. 

Best of luck in your investing! 

@Jonathan Quesadilla If you're looking at multifamily properties, FHA is the way to go. It allows you to put 5% down, whereas the minimum for a conventional product is 15% (I'm not a lender, but that's the last I was told by my go to lender). I wouldn't count on the refinance part at the end of the year. Talk with a lender about your plan and see if it's doable. I'm not sure if you could refinance if you don't have 15% equity. I could be totally wrong though! Talk to lenders and find out your options. Last thought on refinancing...rates may go up. If they do, then refinancing would be foolish. Make sure you have a backup plan (ie STR rental, remodel the units to build equity in the house and sell, stay longer than 1 year, etc).

For househacking, I always recommend less down, not waiting to save up 20%. If you do, then you're missing out on half the reason househacking is so powerful. It allows you less money in the deal, and exponentially increases your cash on cash return, starts your time in the market sooner, and allows you to start saving money on living expenses faster. Waiting until you have 20% down is silly IMO. 

One other way to compound/accelerate your equity growth is to get a property that needs some work. You can use a construction loan to do it as well, not swing the hammer yourself. That would give you equity AND the househacking strategy. Just throwing that out there!

In trying to decide between two cities, I 100% agree with @Conner Olsen. Remember that a househack is an investment strategy but it's also where you live. If you're miserable in your housing situation, it may make you act a little more impulsively down the road (and impulsive is never a good thing in real estate). 

In order to assume a loan, you'll need lots of cash on hand. If the seller only owes $200k and he or she is selling for $500k, then you'll need to bring $300k+ to the table in order to purchase the home. And not hard money cash, all YOUR cash. 

I can't speak to the Austin/Houston area, but I don't recommend my clients focus solely on assumable loans. Finding a househack that you like is tough enough in a market where inventory is limited. That will limit your search even further. Not to say that you shouldn't go for it if you find it, but I wouldn't narrow my options that much. Just my two cents. 

Let's get back to the fact that this is a househack. Does negative cash flow mean that you'll be paying $750/month out of the mortgage? Or are you assuming a $3k rent when you move out and doing numbers based on that? 

When you're househacking, it's not the same as analyzing a regular investment property. The main goal is that the househack reduces your living expenses, allowing you to save up money for your next investment, whether that's another real estate investment or accelerating your contribution to other investments/savings. 

Is this househack going to allow you to live for cheaper than you could rent a similar place? Is it a place that you'd like to live? You're more likely to be able to stay longer, should you need to, if you like the area. If you go to another neighborhood that you don't like as much (for example, the C- neighborhood perhaps), then you might feel more stuck and anxious to move and make a decision that might not be the best down the road.

As much as investors love to run numbers, it's tough to do with a househack since you do have to live in the property for at least a year. Who knows what will happen with the rental market in a year. Maybe you'll love it and want to stay for longer. Maybe interest rates will come down and you can refinance. Maybe rates will go up and you'll be so glad you locked in the rate and house that you did. Predicting the future is impossible. Look at the numbers today. Do they make sense to you for what you'll be paying once you live in the home? Is this an average deal, worse than average or better than average for the area? 

There are also other exit strategies down the road. You can force appreciation and sell, you could do a mid term or short term rental (assuming no zoning/HOA laws prohibit those). There are other exit strategies to increase your cash flow besides LTR.

Also consider that you're putting 0% down. Most investors can't cash flow with putting 25% down, so don't focus on that. 

I'd recommend some soul searching. Every person you ask your question to will give you a different opinion. What will make YOU happy while also helping you accelerate your financial goals? 

Just a little broader comment on the topic....I've seen quite a few new construction homes that are 1/2 of a duplex. They're calling them duet homes. There's no HOA, the parcel is subdivided into two parcels so each home conveys with land.

Our new UDO for Charlotte is encouraging more higher density housing, so we may start seeing this more as builders are trying to build more housing on the same amount of land. If the zoning department requires a specific amount of road frontage for each lot, and that prevents the lot from being subdivided, then we may start seeing that more. 

Good question! I don't think I've run across that yet.

This isn't really what you were asking for, but I'll throw it out anyway. To prevent a situation like this ahead of time, I'd recommend writing a list of what acceptable terms you have to accept a tenant or decline them. Picking and choosing what you'll accept opens you up to liability if a tenant claims you discriminated against them. 

If the eviction makes you nervous and is part of your criteria of why a tenant would be denied (ie no evictions in the past 5 years or something like that) then either deny them both or put the lease only in her name. Just make sure it's a policy that you have so that you make sure you treat everyone the same. 

Just my two cents. 

It all depends on your goals, I think. If your goal is the most amount of cash flow, then rent by the room would probably be more profitable. If a renter doesn't have 3 other people they know to share a house together, then they likely wouldn't be applying, so you may have a higher tenant pool if you do it by the room. 

On the flip side, individual leases causes a little bit more work for you. Additionally, you may need to set up some 'house rules' so that it prevents any disharmony with the common living spaces. 

Let us know how it goes!

Sunnon Property Management is also a great PM. They have different tiers of service, and I'd say they emphasize making sure your property is in great shape before getting tenants and keeping turnover low. Depending on the tier of service, they'll inspect the property multiple times during the lease term, and they also offer eviction guarantees, etc. https://www.charlottepropertym...

Hi Merlin, exciting news about moving to Charlotte! There's a few ways you can find an agent on this site. You could go to the forums and search for agents that are talking about multifamily homes in the area. You can also use the Find an Agent tab at the top of the page. 

Multifamily homes in Charlotte are very hard to find and are in limited supply. The good ones go very quickly and all of them go for top dollar from what I've seen. If the goal is house hacking, I'd recommend expanding your search to something that you could turn into a multifamily property, such as a detached garage that could be converted, etc. Building a multifamily home is always an option as well, and the new zoning laws in CLT make that much easier I believe. 

I think 30-35% is extreme. All agents are familiar with the referral structure, but 25% is my norm. For a lead that you have to work so hard to cultivate, such as a Zillow lead, that's a lot. My team used to use Zillow as a lead source but dropped them a couple of years back. In my experience, with Zillow leads, many are not serious or do not value Realtors and simply look at them as door openers. I'd much rather focus on other sources for buyers and sellers that are more inclined to talk to an agent and respect our expertise and time.