All Forum Posts by: Sevy Bialke

Thanks @Amber Gonion, I appreciate the relatable statistics. I do plan to work with a real estate agent. For that matter, I plan to work a real estate agent after this first deal as well (assuming there will be more). There's so much to learn and absorb that's one aspect I'm happy to pass to someone better qualified until/unless it makes sense in the future.

As an agent, maybe you can provide a little insight. I'll be looking to purchase in the Spring. I have a loose idea of what we'll be looking for, but the timing is a little up in the air depending conversations with my employer as my 2 year contract comes to a close (could be April, could be June, etc.). I'm willing to buy a month or 2 early for the right deal and carry the costs, or a month or 2 late (my parents graciously would take us short term). When would be a good time to engage an agent and start the conversations on what we're looking for? I'd hate to start too early and waste their time, but likewise I'd hate even more to start too late and cram my loud family (2 kids and 2 dogs) into my parent's home for longer than necessary.

Any insight is very appreciated!

@Art Perkitny Thank you, this is exactly what I was looking for! I suppose I didn't dig deeper online because I assumed that there are some things that Google won't simply hand me. I totally agree and have no intention of buying based on this alone, but it was more of a validation of the general area I wanted to choose and I'll dive into detail (neighborhood level, specific PP's over time, rents, age of homes, etc.) from there. Even though the mantra generally seems to be "pick an area and make it work," especially in the twin cities area where the market seems to be favorable, I always strive to make a fact-based decision; even if that "fact-based" is subject to biased-interpretation, it still gives me a warm and fuzzy.

@Jordan Moorhead @John Woodrich Thanks for the advice. I do plan to buy where I want to live and work from there, but where I want to live is a fairly open area. I primarily worked in Golden Valley, will likely be working in St. Paul in a year, grew up in Hastings, and own my primary-turned-rental in South St. Paul. For me this exercise was to narrow down or at least validate my intention of house hacking somewhere in the St. Paul-down-to-Hastings belt of suburbs so in the long run my properties are roughly in the same geographical area. Thanks again for the tips!

Thanks @Joe Villeneuve. My journey was also self-taught but with google and forums, there's not much that can't be learned! I worked in IT for a while and our joke (which I applied to my excel journey) was that I'm not any smarter or better trained than the next guy, I'm just more adept at google searching! I agree too that it's nice to feel knowledgeable until you see the other 40% and are wowed by how much you don't know!

Do you have any suggestions on how to take this marketable skill and deploy it as a side hustle value-add to a more experienced investor? My fear is that the interested investor is such a small subset of investors that are maybe only a few deals in, big enough to need organization, but not yet big enough to be paying for a full back office package.

I own one accidental rental and am looking to purchase a smf house hack in about 1 year in the Twin Cities / St. Paul suburbs MN area. I'm anxious to dive into this game but with a family that doesn't yet see the big picture and 2 small kids, it's going to be a bumpy start with time commitment.

I'm convinced on the mentor/knowledgeable partner to start off on the right foot. I can't count how many times @Brandon Turner has said "50% or some other % of the profit is better than 100% of no profit" in the first 80-or-so podcasts I've rifled through in the last 4 weeks and I've agreed every time. However with 2 kids under 2 and as-of-yet reluctant family, I've been reflecting on my skill set on how I can add value to a more experienced investor without  consuming all of my free time not being home.

I can do just about any DIY project but so can any joe-blow looking to be a handy man. Where I may have some uniqueness is that I have an extremely strongly skill set in Excel and VBA. I spent 2 years almost exclusively operating in excel for my company, building KPI reports, budget review files, rough-&-dirty P&L statements that would update daily for my division instead of monthly from accounting, inventory tracking sheets, etc. My crowning achievement was to take my 50 hour/wk job and automate all of it down to about 2 hours of pulling some data sets and then running macros with formulas so I could pass it on and take a promotion in the operations side of the business. At one point I built out a reporting package for a volley ball coach on their team's overall stats and individual team performance, all based on data entry from one source. I toyed with trying to turn that into a side gig but never went further.

I realize any very seasoned investors are likely paying for a software that probably handles the majority of standard reporting so my value-add may be limited to investors with a smaller port folio or investors with very specific and customer reporting desires. Regardless, in my corporate world, there is never a shortage of need for random excel files to be built (automated capex request forms that email out reports, one-off analysis market sheets, rebuild an ROI to be user-proof, etc.)

Am I barking up the wrong tree?

Where can I add value?

How can I market myself to those that see the value?

Any recommendations on how to approach that relationship assuming I get to an initial conversation?

Obviously this is a very rough-and-dirty method with a lot of assumptions (zillow's accuracy, only looking at median prices, number of units per smf, etc.) but I'm curious on people's thoughts on the validity of it. My intent is to at least narrow down where to look for a farm area, or more appropriately if where I'm looking to house hack will be a reasonable place to setup shop for my near future as a buy and hold investor in the St. Paul suburbs area of MN.

I used https://www.zillow.com/research/data/ to download some data for the past 18 months on home sale prices and rent amount by month. The Sales Prices are any residential properties 4 unites or less. The rents are broken out between single families and small multi's. I did the calculation separately to see if there was a distinct separation there as well. Despite some feverish googling, I wasn't able to find average number of units for smf homes so I assumed all were duplexes in order to stay conservative and only multiple the median rent by 2. Threw in a few quick formulas to show me the rent to purchase price ratio 2/(Purchase Price / Rent).

I'm keen on BRRRR so I plan to add value and buy under market so I would expect my own PP to be lower, boosting these ratios up, but I'd rather be conservative to start. Thoughts on relying to heavily on this to determine a market to dive further into with greater detail?

@Jordan Moorhead Let me know if that duplex pops back up on the market ;) Appreciate the feedback!

Thanks @Amber Gonion. I guess that was my point, was whether I should be willing to sacrifice the greatness of the deal for the timeliness of the deal. It is encouraging to hear your perspective.

@Bruce Runn & @Nick Giulioni Thanks for the insight!

@Jeremiah Duckworth welcome to BP. I think I followed your exact path - I joined BP 2 weeks ago and hit 25 podcasts the first week. I'm still absorbing all that I can but I do own one rental that I'm applying my knowledge back to and currently live in a long term flip as well.

I bought my first primary in MN, added almost 90k in value through forced and passive appreciation in about 3 years. I refinanced to give me the down payment on the next property. I then moved out to Milwaukee and rented it out. This ended up being a terrible thing for me. 

My word of caution: just as you would do with any rentals you're researching, really do the math on what your higher payment will mean to your personal expenses. For example, I did the cash flow math (before I did any rental researching) and decided I could make money on that home. Then I refinanced and now I'm cash flow negative because I did the math with the original mortgage payment and not the 50% higher payment. I really wish I had sought out BP sooner. I'll likely end up selling that home to apply to my next investment.

I don't think I quite answered your question, but hopefully something additional to consider. Good luck!

Hi all,

I'm very interested in house hacking a small multifamily (I currently live in a sfh and rent out another sfh). I'm conservative by nature and understand the statistics of having to sift through many homes, offers, and deals to the find the right one while sticking to my guns on my criteria. However the timing of my purchase is constrained by whenever my employer decides to move me back to MN in the spring. This will make me a "motivated purchaser" which I fear will force me into purchasing the "best deal I can find" compared to "the right deal."

I have 2 kids under 2, 2 60lb dogs, and a wife that doesn't see the glamour of living in a smf. As much as I want to be thrifty owner/investor, I also don't want to be "that tenant" to my neighbors nor put an undue strain on my family for purely financial reasons. I'm personally open to renting short term or even moving in with my parents for 1-2 months (the upside of having 2 grandkids they currently don't see often due to distance) but with a wife that hates moving once let alone twice in a 3 month period, I'm also hesitant going down this path.

Will I have to compromise on my numbers to make this work? Any suggestions or tips on making this work?

My unrealistic ideal scenario: find a vacant 2 or 3 unit smf that has one unit in decent shape. We move into that unit, I do the repairs personally on the others, move into one of the others to finish rehabbing the first unit, rent them all out and move on to the next home. I realize rehabbing myself isn't scaleable, but it helps mitigate my risk initially by keeping my capital investment down and the house hacking portion means my "investment holding costs" are minimal or 0 because they are absorbed into my primary living expenses.

@Tyler Kress I love the plan as that's the path I'm on in about 10 months when my work contract ends and I move back to MN. I currently have one accidental rental for the past 2 years and have been absorbing as much as I can to apply to that accidental test and continue on with a small multi family house hack.

I have a couple skeptical family members/friends as well but I see it as a learning opportunity for private lending conversations later. I've heard/read time and again that if the deal is good enough (i.e. the math works) then the money will come. In other words, prove out the deal and you'll convince a stranger (or hopefully someone you've already built a relationship with) to give you their financial support. Practice on your family by proving the deal, and getting at least their moral support if not financial.

Good luck to a fellow newbie!