Why You Shouldn’t House Hack to Get Started in Real Estate

by | BiggerPockets.com

Today I’m talking to you guys about why you shouldn’t house hack. In my opinion, it is a big cop out. People are lazy, and people want something for nothing. “Oh yeah, I going to put down a $50,000 down payment, I’m going to buy a duplex, I’m going to live in one side and rent out the other, the property is going to appreciate in value, and there’s going to be fairy floss and mermaids coming out of the ocean.” Seriously? Come on, guys. Nothing comes easy.

It Takes Money to Make Money

For instance, I rent. You know why I rent? Because all of my money is out there making more money for me. I don’t want to own because why would I? When you own, you are anchored to one particular location when you put a down payment on a duplex or a big property with 17 bedrooms so you can rent it to stupid college kids or whatever it may be. Guys, money makes money. It takes sacrifice to achieve success, to achieve financial freedom, to get to where you need to be.

Related: 7 Steps I Took to Land My First House Hack (& Rent it Out) With Ease

I moved to this country with $15,000. I absolutely worked my butt off to be where I am today. I’m up at 5:00 a.m. every morning, and I do not stop until 7:00 p.m. Instead of house hacking, get out there, work two jobs, save hardcore, be frugal, and rent a bedroom or a crappy little apartment. Don’t anchor yourself down to a particular location. Adapt, be mobile, and move. If you’re now saying, “But I can’t find great deals” in San Diego or New York or wherever, know that neither could I in Australia, so I moved to Toledo, Ohio out of all the places. It’s not the most glamorous, but the numbers make sense, and it’s a great real estate investment market. That is what you have to do.

Stop Taking the Easy Way Out

I think house hacking is an easy way out. It’s like everyone jumping on the bitcoin bandwagon right now. I’ve got no freaking clue what bitcoin is. I don’t understand it. House hacking I more so understand, but I still think you should rent, be mobile, and keep overheads at a minimum. You do not want to have any expenses associated with your house hack property that you’ve put a down payment on to where you have to put your hand in your pocket to cover all kinds of stuff. You’re better off investing money in buy, fix, and flips. You’re better off wholesaling once you have enough capital to cover the contingency of the times you don’t have someone to close on that contract. Buy, fix, and flip a few times over—and then hold so that your cash flow will be able to support your rental expenses. Don’t buy and own, and don’t house hack. Money makes money. Invest in real estate, and once you can make enough capital and comfortably afford to buy and hold, then buy and hold.

Related: Why I’m Not House Hacking (& the Strategy That Will Cover More of My Rent)

Here’s another tip for you. When less than 10 percent of your net wealth buys you your dream property, that is when you should pull the trigger. For example, my dream property is a $5 million penthouse condo in Manhattan. So my net wealth needs to be at $50 million. I’m not quite there yet, but I’m getting there. 

Guys, that’s my opinion. Take it or leave it.

Comment below.

About Author

Engelo Rumora

Engelo Rumora “The Real Estate Dingo” is a successful property investor, motivational speaker and serial entrepreneur that quit school at the age of 14 and played professional soccer at 18. He is also a soon to be published author along with becoming a TV personality in his very own real estate house flipping show. To find out more go to engelorumora.com . Engelo Rumora has been involved in over 400 real estate deals and founded five businesses in Ohio. The most successful is Ohio Cashflow, a company that specializes in providing turnkey properties in several Ohio markets. The newest venture is List’n Sell Realty, a real estate brokerage based in Toledo, Ohio and soon to be known as the #1 discount broker in the country.

53 Comments

    • Exactly. House hacking can be cheaper than renting. In which case, you get all the benefits the author describes, plus owning the place you live in. Do the math. If it works, it works.

    • Engelo Rumora

      Thanks Alex,

      In my opinion you can scale quicker by renting and investing rather then owning.

      Personally,

      I can turn $50,000 into $100,000 in a couple of months.

      $50,000 on a downpayment will take years and years of appreciation before a significant return on investment is visible

      Thanks again

  1. Craig Curelop

    Hey Engelo,

    I love your energy. I saw your presentation at the Real Estate summit in Oakland last year (2016) and you killed it. I was just starting to learn about REI at the time and you were the first person to make me truly understand what, “figuring out your why” meant.

    Anyway, I must say, I do not agree with you here. I am house hacking to the extreme right now. I live in the bottom unit of an up/down duplex and rent out the bedrooms in my duplex while living behind a few curtains in the living room. I’m up at 4:30am and am pretty much non-stop until 9:30pm-10pm at night. I would say I am living well below my means and I would certainly not consider myself “lazy.”

    As for the numbers, I cash flow on average $500 a month after expenses. After closing costs, I was all in for just shy of $18k. That’s a 33% CoC annual return. I don’t know where I could get those returns with limited changes to my life elsewhere.

    • Brandon Hall

      I have a similar experience. I was living in a DC apt renting at ~$1600/mo including parking. I bought a three-unit in Baltimore (where my fiance was living/working) and lived in the first unit.

      My overhead went from $1600 per month to a positive $400/mo. This was critical for me as I was transitioning out of the W2 world and into my business, so reducing my overhead was extremely important.

      I now live in Raleigh NC, so I don’t think house hacking really burdens you to any particlar location. But even if it did, getting paid to live isn’t a bad deal.

      Additionally, I was able to uber leverage my three-unit (5% down) which may not be advisable to all based on risk tolerances. For me, I’m not confident that interest rates will be this low over the next 5-10 years. The ability to leverage at such low rates is what beats renting imo.

      But, I also side with Engelo on the “first investment” idea. The Baltimore 3-unit was my second rental property. I bought my first rental while I was renting in DC and did not live in it. It taught me a ton about investing and what to look for/expect and helped me understand how to structure my Baltimore 3-unit.

      Six in one, half dozen in the other.

    • Engelo Rumora

      Thanks for your kind words Craig.

      What market are you based in?

      Will $500 per month give you financial freedom?

      You should have used your $18,000 to buy, fix and flip a D Class property in a run down market.

      Rinse and repeat until you can buy and hold.

      I just don’t believe in tying up money and waiting.

      “Money makes money” so stay liquid and stay active.

      Much success

  2. David Goossens

    House Hacking is a very straightforward and realistic way for the average-joe to start down the path to financial freedom. You don’t need a large amount of cash to get started, and with a couple of properties, one could live for “free”, and no longer be tied to a JOB. House hacking might be a cop out if you want a $5mil penthouse in NY, but if all you are after is more time with your family and more time to enjoy hobbies, house hacking can get you there in a relatively short amount of time.

  3. Jack Pinney

    I would disagree. “Hacking” (I am not a fan of the term, but since it’s become common parlance, I’ll use it here) is a great way to get your foot in the door to building wealth. Instead of the traditional 20-25% down payment for an investment property, a house in which you live only requires minimal down payment. So, if you buy a $100k duplex, you may only need $3k down on the property (FHA loan), which is only slightly more than rent and deposit would cost you anyway. After that, your tenant in the other unit probably pays for the majority of your mortgage, thereby limiting your monthly housing expenses, which was your point by renting a crappy little apartment in the first place. My first investment property was a 4-plex that I bought for $0 down using a VA loan. My three other tenants more than covered all expenses, and actually gave me positive cash flow. In effect, I was getting paid to live where I did.

    I understand your point about hard work and making sacrifices, but sometimes what you need is that first deal to get your feet off the ground.

    • Engelo Rumora

      Thanks Jack,

      “That first deal” should come when you have more than $3,000 to invest.

      Anyone looking to invest with only $3,000 is looking to make “something for nothing”

      Work hard and save money,

      Then pick a strategy and start investing.

      I don’t like shooting around the bush call it as it is.

      All good things take hard work and sacrifice and “House Hackers” don’t seem to like the idea of Hard Work.

      Just my opinion off course.

      Thanks again

      • Cindy Larsen

        Work smarter, not just harder. Do what makes the numbers work. A small multifamily (1-4 units) that you live in can be a great way to start out, and the numbers should work out to BETTER than the numbers do for renting an equivalent half of a duplex, or an equivalent apartment. If they don’t, dont buy the property.

        House hacking gets you:
        * lower interest rates on your loan because you live in the property
        * lower downpayment on your loan because you live in the property
        * rental income that receives great tax breaks (deductions from rental income, before it is taxed):
        – depreciation on the part of the property you are renting out
        – expenses on the portion of the property you are renting out: repairs,
        maintenance, property taxes, mortgage interest, insurance, etc

        The rental income that ends up getting taxed after all those deductions is a relatively small portion of the total rental income, and, it gets taxed at a lower tax rate than w-2 income, since there is no FICA tax, etc, on rental income.

        With high enough leverage, your rental income may actually result in a paper loss, because deperciation is figured based on the purchase price, not the downpayment. That paper loss can be used to reduce the taxes from your W2 income (up to $25,000 of loss, I believe).

        That potential loss is not a real loss, because depreciation is not a real out-of-pocket expense. Depreciation on a property is 1/27.5 of the purchase price, every year. This is about 3.63%. If you buy a 4 plex, and live in one unit, the depreciation is 3/4 of that, or about 2.7% of the purchase price. On a $400,000 property, this is $10,909/year of the rental income that you are NOT getting taxed on. If your marginal tax bracket is 25%, this is a tax savings of $2,727/year for an expense that cost you $0, zip, nothing. All the real expenses, are also deducted from the rental income: Basically 3/4 of everything the property costs you.

        On top of that, you get to deduct the remaining 1/4 of the mortgage interest and property tax for the 1/4 of the property you are living in. And, since your ran the numbers assuming that the rent for each unit covers its expenses, including 1/4 of the mortgage payment, you get a bonus: whatever the principal portion of the mortgage payment is, 3/4 of that is being paid by those renters. So, your rental income is increasing the equity of your property every month by four times the principal you are personally paying for.

        Unless your landlord is an idiot, when you are renting, your rent is HIGHER than all of those expenses that he is deducting from your rent: otherwise the property does not have positive cash flow. Renting also does not let you deduct the part of your rent that the landlord is paying toward mortgage interest: he gets that deduction. And he gets to build equity. You don’t.

        Also, you can reduce or eliminate the property management expenses on the property because you can self manage it, which is easy and does not take much time (certainly less that self managing the property from the rental you live in across town). Since a property management company would charge you around 8% of the monthly rent for each unit, For a 4 plex, this adds up to 24% of the rent on your unit, if you were renting it. As property manager get to pick your neighbors based on their good credit history, and lack of criminal background. You get to write the lease, and put in any terms that you want: don’t want a barking dog next door? No problem, only allow cats, or no pets at all.

        If you run the numbers on a miltifamily property with positive cash flow, you should find that it costs you a lot less to live in a property you own, than to rent that same apartment or duplex unit from somebody else.

        Sorry, Engelo, but I strongly disagree with you about house hacking. I hate the term house hacking, but I love the money it brings in.

        Also I’d never buy one of those D class properties you recommend. The property management cost for D class tenants is much higher. B class properties attract tenants that pay their rent on time, don’t have to be evicted, have lower vacancy rates, and don’t trash your property.

        But, to each their own. There are a lot of different paths to wealth through real estate. House hacking is a great path, expecially for begining investors. But it’s not just for beginners: by the end of next year, I will own several profitable leveraged multifamily properties: at least 20 units. And I’ll still be living in one of my units, because it will cost me much less than renting, or than living in a SFH that is not part of a multifamily property. And I can feel good about being a landlord, because I treat my tenants fairly and maintain my properties so they are properties I would want to live in, in areas I would not be scared to live in.

        Also, investors, if your family needs or wants to live in a SFH (instead if an apartment or a duplex) it is possible to find properties with more than one house on the same property, and end up paying less to live than you would for that same SFH if it was all alone on it’s parcel. Just run the numbers, and do what makes sense. Whatever you do, never pay more for a property than you would if it was a rental with positive cash flow. That way, if you loose your job, and can’t make the house payments, you can rent it out, and not loose the house, while you live someplace cheaper for a while.

        And please, Engelo, quit discouraging people from getting started in real estate.

        CJ

        • Karen Coffelt

          I wholeheartedly agree with you, Cindy! I see nothing wrong with what people are calling house hacking if it means that you can live in your own home for free, or better yet, get paid to live there. The beauty of that is that you don’t have to work as many hours at a conventional job, thus freeing up much of your time to look for more deals. Or you can continue to work full time and stash away all that money that you’re saving on rent towards down payment on your next investment. What’s wrong with that? Nothing!

        • Engelo Rumora

          Hi Cindy,

          I appreciate your detailed comment.

          Some of the things you mention don’t sit well with my strategy and I wouldn’t advice others on it either.

          Using leverage to start investing and saving on taxes.

          Most average folks can’t even manage their credit card statements so “house hacking” with high leverage could be a recipe for disaster for them.

          Also, investing in general is about making as much money as possible and not for minimizing taxes.

          The more in taxes you pay means, the more income you are earning.

          If folks get discouraged by reading an article written by an unknown individual like myself. Then that in itself is a huge warning sign and they should seriously re-consider any kind of real estate strategy.

          My blogs go against the grain and I’m not looking to make friends with them.

          if I help just one person stop and think before making a mistake and doing something that isn’t right for them or their long terms goals.

          I would consider that an accomplishment

          Much success

      • Ryan Hightower

        Sorry, but your opinion is completely off base. If you really want to call it like it is, then say what it really is- lazy people equal lazy people. House hackers don’t equal lazy people. Brandon Turner is the perfect example of what a house hacker really looks like. He’s a go-getter, do-it-yourself-er, super hard working kind of guy. To make blanket statements like “house hackers don’t like to work” is just wrong.

        Just my opinion, of course.

        • karen rittenhouse

          Engelo:
          I strongly disagree with your comment that ‘investing in general is not for minimizing taxes. The more in taxes you pay means, the more income you are earning.”

          When you stop paying the 30% per year (or whatever your tax bracket) to Uncle Sam, that is a HUGE raise in income, especially when you get into the high 6 and even 7 figure incomes. Real estate is the greatest tax break offered in this country.

          Many of the uber wealthy in real estate pay nothing in taxes due to write offs (take our President, for example). And avoiding taxes is one of the main reasons high wealth individuals invest in real estate.

  4. Take it or leave it, you say?

    I say, “Leave it.” I house hacked twice in the past three years, and still own them both. Both of them are doing extremely well.

    One has great equity AND Cashflow, and the other will have good Cashflow when we move out. The income that we show the bank will increase the appraised value. Both I got in for under $20k, and had renters paying the vast majority of the mortgages while I used my income to fix them up, which I, and 95% of the population couldn’t do if I saved up 20% in cash plus capital expenditure… instead I used FHA loans with 3.5% down since I lived in them.

    I also cash-out refinanced to get all my down payment money back, and my fix it money for the first unit giving me an infinite return.

    Why would I put my money in the stock market now when it is at all time highs? Why would I buy precious metals when they are at all time highs? Why would I buy speculative bitcoins when they are at all time highs?

    Why would I flip properties when I pay at least 20% in taxes on each sale? House hacking is definitely a legit option for investors if you buy them at the right price, and have a solid exit strategy. I hear definite deficiencies in the author’s understanding of how the tax system works, and fundamentals of investing.

    Readers beware.

    • Engelo Rumora

      Thanks Derek,

      You only did 2 deals in 3 years?

      You borrow a tonne of money and don’t like paying taxes?

      Look how many numbers you’re throwing out: 3.5%, 20%, 95%, etc…

      It’s too complicated.

      My strategy is simple: Buy, fix, flip and make money.

      The more in taxes I pay means I’m making money.

      It also seems like you should be an accountant and not a real estate investor.

      Much success

      • Cindy Larsen

        Engelo,

        Really. Please quit insisting that your path is the only path. So you are making money flipping properties. Great. I am making money as a buy and hold investor. I made money as a BRRR investor. I would hate the stress of flipping multiple houses/year. have you considered that if you rented your properties for a while, so you hold them for at least a year after buying them, you could pay 15% capital gains tax instead of 20%? You could have multiple properties in the pipeline, and have higher profits in each of them.

        My point is that there us more than one way to invest in real estate. Your path is not the best one for everybody. And, you seem to not understand the merits of the other paths, or you would not be disparaging them.

        Telling people about the merits your path is great. Telling them that their perfectly vaild, profitable path is bad just annoys those of us who know from experience that house hacking, or BRRR, or buy and hold can all be very profitable.

        Worse still, you are misinforming people who think you are an expert. You may be an expert house flipper, but you don’t seem to be an expert at other kinds of real estate investing. Perhaps you should investigate the other paths more before mistakenly telling the world that those are not good paths. Because, you are flat out wrong.

        • Engelo Rumora

          Thanks Cindy,

          Please feel free to read through the variety of articles I have written for Bigger Pockets over the last 4 years.

          I believe there is almost 150 of them and they all offer advice on different real estate investment strategies.

          And off-course there are many different ways to succeed in real estate 🙂

          You also might find out a little bit more about my style and it will enable you to understand things better regarding my raw approach.

          I stress my beliefs passionately and will continue doing so.

          Thanks again and much success

  5. Susan Maneck

    If renting were really cheaper than owning, we’d all be out of business. People who make money off of house hacking are quite mobile, because they move from one hack to another. Hacking is for people who don’t have money, not for those with 50K down. The way you make it work is you buy a small multifamily, no bigger than a four-plex with an FHA loan and 3% down. You hack it for a few years then buy another multifamily the same way, with an owner-occupied loan. Which means you have to live in it for at least a couple of years. Then you repeat. Actually, by that time you can probably afford your own nice SFR, living off your rents. Hacking is best when you are young, especially college students. The mobile life gets to be a drag the older you get. Trust me, I’m 61.

    • Engelo Rumora

      Thanks Susan,

      Why not just buy a multifamily, fix, tenant and stabilize and then sell?

      Make a profit and re-invest in another deal and keep going.

      It took me a few years to “retire”

      2-3 years of “House Hacking” is a long time in my opinion.

      Much success

      • Susan Maneck

        That’s fine if you got the money. But who starts out with enough money for a multi-family unit? House-hacking is for people who are just starting out and IMO it is a great place to get started. Generally speaking you only need to spend two years living in the property not three if you get an owner-occupied FHA loan. But the truth is, nobody checks so you could get by with less. I house-hacked a property while I was in grad school. It was a two bedroom house with a small studio in the back. At first I lived in the studio and rented out the main house. After I got married I lived in the front house and rented out the studio. I stayed in that house until I finished the course work for my PhD. As a result I saved a lot in rent.

  6. Greg Shpunder

    I used a 0% down VA loan for my first 4-Plex. It was required that I live in it. 4 years later i have 22 units. I think house hacking was the best way for me, as a frequently deployed military member, to get into the buy and hold game.

  7. jonah Freedman

    Thank you for the article. I always love to hear different opinions. That being said I strongly disagree. First of all you say it is the easy way out and I would agree with you. It is the easiest way to get started in real estate that is why I think most new investors should start this way. Also I find it is cheaper to buy a multi unit and live in part of it then just rent. This is how I started as well as many successful investors that I know. As far as being trapped your not,because if you want to move you just get up and move and keep your property as a rental.
    Cheers
    JOnah

    • Engelo Rumora

      Thanks for your comment jonah,

      I like going against the grain and kicking folks up the A$$ sometimes.

      I’m not trying to upset folks and I’m sorry for turning some of them into keyboard cowboys lol

      There is nothing easy about real estate investing.

      You’re in for a rude awakening even if you think house hacking is easy.

      Work long and hard.

      I wish you much success

  8. Ewa Reza

    So you’re calling house hackers lazy? Really? Coz it took me a lot of time, planning and effort to buy my first triplex. The best thing I did! And certainly for many people who are single (one income to qualify) and live in big city like Los Angeles, it is the only option to get into a decent neighborhood and investing game.

    • Engelo Rumora

      Thanks Ewa,

      If I was you, I would have never invested in LA as it’s too expensive.

      There are many other cheaper markets in CA where you could have flipped for profit.

      Flipping is a much quicker path to financial freedom.

      You chose the “waiting for appreciation” strategy.

      Nothing wrong with that but it’s not how I invest.

      Have a great day

  9. John Glaze

    I’m very new to all of this only been researching and hunting for a year now but house hacking is exactly how I plan to get into real estate investing. I’m driving for dollars locally but having zero luck and now I need to find a better market than north west Georgia.

  10. Like Bitcoin just because you don’t understand it doesn’t make it a bad investment or compared to as one … simply because someone lacks knowledge on it. Bitcoin is not the easy way out just like real estate is not the easy way out. to educate yourself and being aware on what is going around you in the economy and not be singular minded on only one source of income opens a lot of opportunities. FYI In Texas an entire Real Estate transaction happened with bitcoin, yes a property was bought only using Bitcoin …. how cool is that!

    Everyone has to mitigate their own risk temperatures and even in real estate you have to do whats good for you although I always suggest going a little more outside of your comfort zone each time to reap the benefits. If you want to see bigger results then like you said the House Hack is not going to take you that far …stretch beyond the borders of your comfort zone and you will see much larger profits like the buy, fix and flips especially with a good team.

    • Engelo Rumora

      Thanks Keoni,

      Our company offers properties for sale via Cryptocurrencies and we are in process of doing an ICO for a tech platform we are developing.

      Bitcoin is a risky play while Blockchain is not going away in my opinion.

      It will be like the Dotcom bust. Amazon and EBay survived while many others went bust.

      Will Bitcoin survive the crypto bust? Time will tell.

      House hacking is a very long “waiting” game to financial freedom.

      I don’t recommend it and would advise folks to stay busy and super active.

      Hustle hard and reach your goals quicker.

      Thanks

  11. Matt Fitzgerald

    Where is your data? There are no concrete examples of why this is working for you and no real numbers as to why house hacking doesn’t work. Stop taking the easy way out with this article by just pontificating. Do the hard work to analyze your data and present it to prove that your strategy is sound and profitable.

    I “house hacked” buying a duplex, which allowed me to save money to buy the duplex next door the following year. I lived rent/mortgage free that allowed me to save money for my next investment 5 years later. My next investment was a dream beach house that I rent out in the off-season and use in the summer with my family. I guess that’s sort of a house hack too! Oh and by the way my duplex’s have doubled in value in 6 years. I still live in one of my duplex’s and am mortgage/rent free. “House Hacking” definitely works in my area (Boston) and it was the only way I could get started. It wasn’t easy and still isn’t easy, but the hard work is paying off. My strategy may not work for everyone because real estate is local and it depends on what the local market will bear and if it will support one’s strategy. Good luck out there.

    • Engelo Rumora

      Thanks Matt,

      I don’t do data.

      The only data I like doing is buy, fix, flip, make money and repeat.

      5 years of saving is a long time mate.

      I’ve flipped 450+ properties over the last 5 years.

      I’m not trying to sound like a pompous A$$ here but even if the average folks just flip 10 properties in 5 years, they will be much further ahead than house hacking 2 properties over that time.

      You took the easy way out in my opinion but well done on your success.

      Keep the dream alive

      • jonah Freedman

        Hi Engolo,
        Why do you believe that flipping 10 properties over 5 years will better set you up financially then a two house hacks? Flipping houses is great I do 1 or 2 a year but it is job. You know what has giving me financial freedom. 3 house hacks in a row.
        Cheers
        Jonah

  12. Brett Holton

    I must disagree with your article, a lot of times house hacking is cheaper than renting. I went from paying $450 per month plus utilities to have a small bedroom in a friend’s house to now living rent free and having the majority of my rent paid. I still set aside the $450 per month for expenses that may come along and that is the “cash flow” for the property. From time to time I will be able to use this money towards other investments, although it almost always will be making at least some return for me in the form of some sort of liquid investment. Seems like a good deal to me. I only needed 3.5% down via FHA financing and will be able to use it as a rental property once the 1 year residency requirement is up, assuming I want to be mobile. I am in college so I am tied down to the area for the time period anyway. The property will cash flow fine even with property management. Oh and in the meantime I will be paying down a $210,000 duplex in a thriving and fast appreciating area. There may be some overhype about “house hacking” but as a real estate investor, renting a house when you have the means to have this kind of arrangement is akin to throwing away your money.

  13. Scott Trench

    I’m interested in continuing to see the comments here.

    One thing that I don’t understand is how house-hacking could preclude one from doing exactly what Engelo is doing in his fix and flip business. I house hack and it occupies almost zero of my time, and I’m able to do it in the relative luxury that I desire, while still keeping nearly all of my wealth deployed in other investments and all of my time occupied in productively working towards my goals. As for lifestyle, if I choose to live in a basement to maximize my return, great for me. If instead, I choose a luxury townhome and simply subsidize the cost a bit with the other homes in the duplex/triplex/quadplex, that’s great too.

    It seems to me, Engelo, that you could in the next year purchase a property as a house-hack, eliminate your $600 per month in rent expense, AND continue to run your business with basically no interruption, save for one additional closing and one move. This would require a very tiny amount of cash (3-5% down payment) and allow you to carry on with your business as usual, except now you’ve eliminated your rent expense, helping you accelerate towards financial freedom or huge wealth even faster.

    If I find a $100 bill on the ground, it may be the “easy way” but I’ll bend over and pick it up.

  14. Joseph M.

    Doing a ton of flips is fine strategy if you do flips full time. I’ve already got a job, so house hacking fits my strategy perfectly. Good on you that you are willing to bust ass, have no ties to any place, and do a lot of flips. I’d say though to consider the fact that 2012-2017 has been the strongest bull market in the history of real estate and people starting now will almost certainly have to approach the problem differently than when you could buy up foreclosures off the MLS.

  15. Diego Ortega

    I agree that flipping is a faster way to make money in some cases, but I disagree about your opinion on “house hacking”.

    I do both and I will tell you house hacking is less stressful once you’re setup and is very passive. My gf and I own a duplex and got a new great tenant after thorough screening. Our mortgage is $1280 and the rent for the unit we rented out is $1500. So that covers our utilities as well. Its a big sized place and we learn to be landlords in the process. It has set us up perfectly to move toward financial freedom. I will continue to do some flips along with getting rental properties and think I can achieve financial freedom in just a couple of years.

    Eventually I can stop flipping properties too and grow my rentals. But calling it easy to house hack and lazy makes it seem like you are upset that people found a shortcut to reach financial freedom and start their real estate investing, no matter which path they choose. Not everyone wants another job, which is what house flipping is, on top of their current job.

  16. Mary White

    I’m not interested in House Hacking either, but we own a nice house in a great neighborhood that we bought as a deep foreclosure in 2011. The payment on it is lower than I rent my 2-bedroom units for so we essentially do live for free, but we get to live in a SFH. If we sold our primary today we’d walk away with over $100,000 profit and that’s with paying $3000 down on a FHA Work Forced Relocation Loan. My current project is a BRRRR 4-Plex (purchased with cash for $116,500, $40,000 in repairs, ARV $325,000). I’ll hold the property and have $240,000 in my pocket once my financing goes through. Why not work multiple strategies at once. I’m doing this all as a Stay at Home Mom and used Ebay profits to start the whole thing. Different strokes for different folks, my friend.

  17. karen rittenhouse

    I’m so opposed to renting and I don’t recommend it to anyone. We even own our office spaces, pay less in mortgage than the tenants renting in the same office condo building, and have write offs and added equity every year since we’ve been there. If we’d been renting, we’d have none of the advantages.

    And the house we live in we simply took over the mortgage 4 days before the scheduled foreclosure auction. My husband was able to offer the bank a work out. They told us to move in and keep making the payments as scheduled (they did NOT want to lose a jumbo loan). We got a much better house than we could have on our own, no money down – nothing – and we get all the tremendous benefits owning allows, including amazing appreciation.

    If you buy a house and want to move around, rent it out, add it to your portfolio. There are so many ways to buy without the large down payment you talk about. Perhaps buying creatively is not your strength? But, please, don’t discourage others.

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