All Forum Posts by: Miller McSwain

We are using the "rent-by-room" strategy, and we put electronic locks on all bedroom doors and the front door. Our locks allow us to remotely add a pin for a new resident, make temporary pins for handymen/contractors, etc.

We looked for any lock that uses the "TTlock" app on Amazon. That way, all of our locks are in the same app and have the same functionality.

The lock we are using for the front door has been in use for 6 months and is at 90% battery 👍⚡

For exterior deadbolt locks (front door, garage door), we used this:
https://a.co/d/2SFMNcy

For normal interior locks (bedroom), we used something like this (the ones we have are currently unavailable, but this has similar capabilities):

https://www.amazon.com/dp/B09P...

You can create codes from anywhere without the locks having internet connection because it can create them using an offline algorithm. But if you want to create specific codes with certain digits (instead of random), you either need to be close enough to the lock to use bluetooth or you need to have a gateway. The gateway is just a hub that all the locks connect to.

We are using this one, but there are other options:
https://a.co/d/0kEUCXv

Quote from @Robert Durden:

Quote from @Miller McSwain:

Hey Robert, I am currently rent-by-room house hacking in Colorado Springs! Similar to you, I also found that RbR SFH made more cash-flow sense than small multi-family.

We are renting 3 rooms in our 5bd house. 2 of the rooms share a bath, and the smaller of those is rented for $700 while the larger is rented for $800. The room with the private bath is rented for $800 also (to a military guy like you mentioned).

ALSO, we pay for all utilities and provide all shared supplies (cleaning supplies, pans, utensils, trash bags, etc). So be sure to think about that when you are analyzing.

We are -$500/month to -$1200/month while we live here (depending on capex/repairs), and we are occupying the whole basement So it is definitely cheaper than rent in our case. When we move out, we will be right around break even, but over time our projections predict mega-cash flow. Also, I think we are going to add a room, so we will make instant cash-flow in that case.

Let me know if you have any questions!

 @Miller McSwain - congrats on this man! Sounds like a great deal. Living in the basement sounds like a great idea! The upstairs of these homes I am see are typically huge. Two questions if you don't mind me asking: 

- Do you mind me asking WHEN you purchased your home? 

- When you are running your house hack numbers, do you include everything like CAPEX, maintenance, etc.? Seems like you have been

Thanks so much! 

 I bought in April 2022, so the market was more competitive than now and interest rates were lower. My purchase price was $460k and interest rate was 4.8%. 

I definitely included capex and maintenance in my analysis!

Hey Robert, I am currently rent-by-room house hacking in Colorado Springs! Similar to you, I also found that RbR SFH made more cash-flow sense than small multi-family.

We are renting 3 rooms in our 5bd house. 2 of the rooms share a bath, and the smaller of those is rented for $700 while the larger is rented for $800. The room with the private bath is rented for $800 also (to a military guy like you mentioned).

ALSO, we pay for all utilities and provide all shared supplies (cleaning supplies, pans, utensils, trash bags, etc). So be sure to think about that when you are analyzing.

We are -$500/month to -$1200/month while we live here (depending on capex/repairs), and we are occupying the whole basement So it is definitely cheaper than rent in our case. When we move out, we will be right around break even, but over time our projections predict mega-cash flow. Also, I think we are going to add a room, so we will make instant cash-flow in that case.

Let me know if you have any questions!

I'm a house-hacker in Colorado Springs, and I had a similar experience when I started analyzing. I found that it was difficult to get Duplexes to cash flow because of the high purchase price; however, it was much easier to find single-family homes that would cash flow if rented out by the room.

As an example for you, we ended up buying a 5 bed/3 bath single-family. We occupy 2 of the rooms in the basement, and the main level 3 bedrooms bring in $2300 while our mortgage is $2800. So we are negative cash flow while living here, especially when adding in capex, repairs, etc.

Even when we move out, we may be negative for the first year or so, but things look much better by year 3, 4, 5, ... So be sure to consider projected cash flow (with reasonable rent increase, expense increase, etc assumptions).

Also, don't forget that you will also be making money from the other 3 wealth generators: Appreciation, Loan Paydown, and Tax Benefits. So when we added those into our projections, we saw that we may be negative cash flow while we live here and for the next couple of years, BUT we are very positive when you consider all the generators.

So in summary, CONSIDER THE BIG PICTURE: projected cash flow and all wealth generators 😀

Are you worried that you won't qualify for this $850k home solely based on your household income? So you are wanting to use the potential income of the property to help you qualify?

I've had a situation similar to this. I purchased a house that I am renting-by-the-room. My lender wouldn't consider potential income when qualifying me for this house.

HOWEVER, he will consider the income of this property when I purchase my next property. So when he is calculating my Debt-to-Income ratio while I'm being qualified for the next house, he will see that all or some of my mortgage payment on the first house is covered by tenants.
I'm not sure if he will assume the market long-term rent income, or if he will actually look at the leases I have in place though.

But basically, I don't think your lender will consider un-proven income to help purchase this house. Once you've proven income though, the lender may consider it during the purchase of your next property.

To back up @Caleb Brown, I talked with a company that does DSCR, and they told me that it is for investment properties only, not owner occupied properties.

One of the main benefits to house hacking is that you can get the lowest interest rates and lowest down payments when compared to investment loans.

So I'd definitely try to go for conventional (5% down) or FHA (3.5% down).

The only reason I can think of to consider DSCR, is that they probably don't care as much about your personal credit. If that is true and you don't have great credit, then I'd probably work on my credit and still buy with FHA/conventional.

Good luck!

@Heriberto Rivas

There are lots of property management softwares. I'm a single-family investor, and I recently looked through the most popular softwares and selected one. The products I investigated were:

1. Tenant Cloud

2. Apartments.com

3. Innago

4. Avail

5. RentRedi

I was looking for a software that met the following criteria:

1. Online payments from tenants

2. Automatic late fees

3. Maintenance request portal

4. Free for the landlord

5. Online applications

6. Tenant screening (background checks, etc)

7. Lease signing

8. Ability to post vacancies in the software

I found that Innago was the only one to meet all these requirements. It does charge a $2 fee for each rent payment, but that is charged to the tenant by default. I haven't had any complaints from tenants about this charge.

The other softwares were pretty good, but here are the deal breakers for each.

Tenant Cloud: Tenants cannot setup autopay unless we have the paid version

Apartments.com: You cannot upload your own lease, you can only make modifications to their lease

Avail: You cannot upload your own lease, you can only make modifications to their lease

RentRedi: No free version

***I investigated these softwares 8-12 months ago, so some things could have changed. For example, you get a discount on RentRedi if you are a BP Pro member that could potentially make it a contender with Innago for my use.

Good luck! 👌

🚀

@Evan O'Brien

I'm not sure exactly what your strategy is, but here is my list of sites for each strategy. I'm currently rent-by-rooming, so I haven't used all the sites listed. I just compiled this list for whenever I do use another strategy.

Traditional Long Term Rental:

- Zillow

- Realtor.com

- Hotpads

- FB Marketplace

- FB Groups

- Apartments.com

- Craigslist

Rent-by-room Rental:

- FB Marketplace

- FB Groups

- Zillow

- Roomies.com

- Roomiapp.com

Short-Term-Rental:

- Airbnb

- VRBO

- Flip Key

- Booking.com

Medium-Term Rental

- Furnished Finders

- Kopa.co

- Airbnb (with 30 day minimum stay)

Good luck! 👌

🚀

@Maximillian Engram

I'm currently House Hacking my first property, and I was advised to NOT put the property in an LLC while we live there. A court would easily pierce your LLC because you are a resident.

So for now, since you have to have an LLC to get business accounts, we have a seperate PERSONAL credit card/checking/savings that we only use for house-hack expenses. We track this completely independent of our other personal accounts AS IF the property was in an LLC.

When we move out soon, we will transfer the property into an LLC, get business credit card/checking/savings that we will use for that property. Then we will use the seperate personal accounts exclusively for the House-hack like before 👌

@Jerry Hill

I use Innago for our property management software, and the tenant can flip a switch to have their rent payments reported to the credit agencies.

Some other PM softwares may have this feature, but I've been very pleased with Innago so definitely check them out 👍