You may have experienced renting for far too long and end up missing out on different opportunities. Did you know that you could start the road to financial security much sooner and still live your own life? House hacks! New slang for some old tricks. If you are freaked out by the monthly payment of owning your place, here’s a thought…don’t pay it all. Renting all or part of your home can work, or buying a multi-unit home like a duplex or triplex might be the way to do it. Being a landlord isn’t just for the experienced and savvy multiple homeowners. You could do this with your very first home purchase. There are plenty of great ideas out there that you might never have heard of, but none of them work until you fully understand them. Join your host David Sidoni in this episode and find out if this is a good idea for you!
How To House Hack Buying Your First Home
First Time Home Buyer Hacks To Pay Less On A Mortgage Payment
Have you ever heard of house hacking? That’s what people are calling some old-school techniques being used to lower your mortgage payments so that you can afford a home. Let’s see if this type of purchase can work for you.
What’s happening, everybody? Welcome to another edition of the show. We’re going to hit yet another topic with all the renters out there. A lot of you folks out there hit me up saying, “My rent sucks and my landlord sucks. Why don’t I buy a place, live in my part of it and then I become the landlord?” Let’s find out if this is a good idea for you. On paper, for some folks, this looks like a killer idea. I get that but I want to tell you if you’re looking for a shortcut to becoming a homeowner, if it was that easy, simple and the numbers worked out perfect, then everybody would be doing it.
Don’t bomb out. Just because I dropped a truth bomb right at the beginning doesn’t mean that it’s a bad idea for you. This could still be a great idea for you. There’s a multitude of different ways that you can do it. The term house hacking is new but all of these tactics people have been using for years. There’s a lot of data out there and different ways you can do it. What I’m going to do is cover two of the most commonly used ways that buyers become hackers.
The reason people do that is because they’re looking to build wealth when buying their very first piece of property, something I can totally get behind. The two big ways are buying a home and then being able to rent out part of the living space in your home or buying a duplex, a triplex or a fourplex, what we call a multiunit home, living in one unit and then renting out the others.
First, before I go any further, I have to dispel an idea that many house hackers and new investors ask me about when it comes to buying their first home. Lots of times I ended up getting a call from a super excited first-time homebuyer. They’re totally stoked about buying investment properties first before they own a home themselves.
[bctt tweet=”If you’re trying to build something, there are different ways that you can do it. ” username=””]
They get to a certain age. Doing their research, they hear about all the big baller billionaires who have enough money to buy their own rockets and shoot themselves into space. They find out when they’re reading that all these rich folks, all those big zillionaires out there and some regular old rich people, most of them, their average portfolio shows 30% is invested in some real estate.
They figure, “Wealthy people make money in real estate. I want to do that. I want to start soon.” I get it. These buyers call me and they’re thinking about buying property for the first time in their lives. They do the research. They listen to a podcast on gaining wealth, read an article or two or have a friend that killed it with a rental property and decide they want to emulate that. Their financial advisor or an entrepreneur uncle told him that they’re going to get killed on taxes because they don’t own property. They decide it’s a great time for them to buy.
I totally get it. I agree. I get the call and they figure out, “What’s going to be cheaper for me to buy an investment property first. I’ll go ahead and do that?” These potential buyers sometimes ask me how to do that before they’ve got a home for themselves. I’ve got one quick take on that. There are some successful entrepreneurs out there that have classes, seminars and techniques or ideas and they preach not to buy your own home.
If you’re following that, cool but I want to make sure you understand that whole big picture concept. Some of these things that these entrepreneurs are saying out there, I totally agree with. It makes great sense. If you’re trying to build something, there are different ways that you can do it. Some people say, “Pay off your whole house right away.” Some people say, “Always keep a mortgage because it’s a leveraged investment.”
Some of these people reached not to buy your home first but to rent. You have to get the whole picture. If you listen close, they’re saying that you don’t buy a house but what you should be doing is living poor. You should rent dirt cheap and use all the extra monthly cash that you have to fund your investments or more often, your own entrepreneurial ventures. See, that makes sense. If you’ve done the research and you realized that the capital that you have that you can keep every month is better spent building whatever it is that you want to build that will eventually become a successful money stream for you.
All you need is that upfront capital. You can get more of that by renting super cheap. That’ll help fund your idea faster and get you to that wealthier place later on. That’s a good plan. Make sure that you understand the entire rest of that story in that recommendation. It’s a big choice and a big life change. House hacking has a little bit of some choices too but let me talk to you if you decide to buy an investment property first before you buy your own home.
This is a big choice for people that are serious. They hustle, got three jobs and live at home for free or are in a two-bedroom apartment with eight other people eating whatever is on sale at Costco. In the wee hours of the night, they’re staying up after their three jobs, creating all that exciting stuff, whatever that thing is that’s going to eventually pay off. They accept this sacrifice. If you’ve got the hustle, go for it.
If you want to buy an investment property before you buy your place, check yourself and your numbers. If you’re living comfortably and you’re paying normal rent, you want to stay there and that’s what you want to continue to do. Usually, the numbers favor buying your own home first and having that asset be the beginning of building your financial security and your wealth. It’s an asset to living that puts your monthly rent payment towards a historically appreciating asset instead of buying an investment property first while you’re still paying rent for your roof.
Don’t hate, it’s just math. I’m going to say it and it’s going to sound lousy but I didn’t just start reading about this. I have been following this for a long time. I had my big ideas in 2003. That’s when I started reading books, figuring this out and buying all my investment property. I can tell you from experience that things went well and not so well for me. I ended up doing this and teaching people.
The one thing I’ve seen in my trials and tribulations, as well as successes and my client’s successes, is if you don’t own a property, don’t be fooled and lured into the idea of a $300 a month positive cashflow on an investment property when you’re still paying $1,400 in a month in your own rent that doesn’t improve your net worth in any way.
On to the house hack idea, which is different from what I was talking about, that’s buying the traditional investment property. A house hack is something that you live in. The first house hack is simple. There’s still that lifestyle choice that you need to accept. You go out and get approved for your max loan approval. You buy a home at that price and that monthly payment. What you do is you live below your means by renting part of that house and saving more money every month.
You’re looking to buy a house. You’ve got your income and your debt. You submit everything to your mortgage broker. The bank tells you they’re willing to loan you $300,000 with 5% down. That’s for a full PITI, Principal Interest Taxes and Insurance. It’s a $300,000 home, 5% down. Your full PITI payment, Principal Interest Taxes and Insurance, let’s say that’s $1,600 a month.
That means you’re approved for that so most likely, you’re going to be able to afford that payment. It’s probably right there in your comfort zone but let’s say that $300,000 and that $1,600 a month payment, what if it buys you a condo in your town and you had your heart set on a single-family home with a pool? You go, look those up and realize, “Those are $400,000.” With our income and our debt, we’re not approved for that.
What do you do? Suppose you can’t stomach the idea of roommates. You look at the concept of saving up while you keep paying your rent. Your partner says that they think that’s counterproductive and you’re tossing money away renting while you’re trying to save up. You say, “We can buckle down and sacrifice by living in a tiny apartment with two other roommates and pay $400 a month. We can save up to get a bigger down payment.”
[bctt tweet=”If financial freedom was that easy and simple and the numbers just worked out perfectly, then everybody would be doing it. ” username=””]
Your partner points out to you, “Okay, but then we still have roommates. Unless our income changes drastically over the next year, we’ll maybe be able to save maybe $1,000 a month with that low rent. We still have roommates and we’re in a cramped space. One year later, we’ll have an extra $12,000 to put down but our income is going to be the same. Even with an extra $12,000, we’re still only going to be approved for $300,000, $310,000. The only difference is we’ve got a little bit more to put down so our payment might be $50 less.”
At this point, you either yell at your partner, “Why don’t you use that stupid mathematics degree to go get a better job so we can afford a better house? Do you think you’re better than me?” That happens. You guys split up and end up living in a studio apartment with two roommates anyway or you can go back. Think about the idea of buying a three-bedroom condo that you and your partner can afford together.
Admit that maybe they’re right about something that can be hard but if you do that, you go ahead, buy that place, get a roommate and save up for the next purchase that you have, that bigger single-family home with a pool while you’re gaining equity in an asset that you own. You don’t have to pay the full $1,600 a month. You just have to deal with a roommate. There you go, house hack.
It’s not for everybody but it’s an idea not used enough, in my opinion. There are a lot of people out there that I know have a decent job in their twenties and they could take advantage of this but they don’t know it’s possible. There’s a place I used to hang out at my twenties. Those four different dudes rotated in and out of there. If one of them figured out how to buy a place that he could have rent to all my idiot friends, they’d be king of the castle.
Maybe you can afford $4,000 a month based on your salary but you only want to pay $3,000 a month so you can YOLO and not have FOMO. Instead of having some $3,000 a month swanky one-bedroom apartment for years while you’re thinking about all your plans to make sure that you can buy someday, what about buying someplace and letting your friends live with you and pay a big chunk of the rent? Roommates offset the mortgage. You are going to be getting an appreciating asset. You get the tax benefits. If you can stand your friends, you get a few of them to come in. Your portion is low and you can save while you own.
Do you want more? You got it. Here’s another house hack idea. Same concept but get a co-signer to come on board. You can get a higher approval and get a bigger place. Maybe you can be more comfortable with those roommates. I know this is not practical for everyone. Not everyone’s got someone that can co-sign but for those of you who might have that option or maybe think, “I’m never going to ask,” you should know about this.
If you get a co-signer to help you with the purchase of your first home, you can get a bigger place that might be the kind of place you’d be comfortable in having roommates. You get the benefit of living in a better place first instead of a starter home. The idea sounds great and the concept sounds wonderful but how do you do it? Here’s what I’m going to do. I’m going to walk you through exactly how I helped someone else do this and exactly how you can do this.
I think personally this is something that should be taken advantage of a lot more. Realtors don’t take the time to sit down with their clients and talk to them about it. I’ve already talked to you about how I believe realtors should do a lot more talking to children who are fortunate enough to be in a situation where their parents potentially someday are going to have some inheritance for them. I know so many parents that because they’re old school, don’t think buying their kids first place makes sense.
They want the kids to figure it out on their own and buy their first house. Meanwhile, later on, they’re planning on giving them an inheritance that would have been a fantastic down payment. I don’t get it. If you’re going to give someone money someday, why not give it to them 50 years earlier so the growth can grow out of it? No one throws away rent for ten years because people don’t just come out and buy a home at 22 like our parents or our grandparents did.
This is the step-by-step how to ask someone to help you co-sign. Don’t stress about writing this down. I’m seriously advising you. You can go to HowToBuyAHome.com. You can follow this exact step-by-step. This is the best chance you’ll have of pulling this off if you’re going to ask someone to co-sign for you. If you’re lucky enough to have someone, follow these steps exactly.
Step one, get yourself a local unicorn realtor. If you don’t know what a unicorn realtor is, read other episodes. Get your local unicorn realtor to get you a local unicorn broker. That’s step one.
Apply For A Loan
Step two, apply for a loan to buy your own home, all on your own without the co-signer. Find out what you qualify for on your own.
Put The Numbers On Paper
Step three, get those numbers on paper or put them in a file or electronic file. Get the down payment, the purchase price and your monthly payment on that price. Go old school, print it out, save it, whatever you want to do.
Go Back To The Unicorn Realtor
Step four, go back to the unicorn realtor to give you all the sold homes in your area for that price, take the pictures of those homes. Something shows what those homes look like and what they could be. Print out or save those pictures to a file.
Get A List Of Homes
Step five, get your unicorn realtor to get you a list of more expensive homes, bigger homes that you could purchase that home and rent a room. Figure out what the rent might be. For this example, let’s say it’s $600. Your number could be totally different. If you got that rent and paid it towards a larger mortgage, the mortgage that your co-signers would help you get, you could pay for about $115,000 more home.
If you qualify for that, you could do it on your own and have that guy or gal come in and pay you but you need the co-signer. Have the unicorn, get a list of more expensive homes where you could rent a room, figure out how much rent you could get for it and then that rent have your unicorn add that to the price of your approval to a new approval and find homes that fit that.
Step six, ask your realtor or a mortgage broker to help you come up with that rent number if you don’t know how much your friends would pay and most importantly, how much more in the home purchase that you’re going to need.
Print Out The Homes
Step seven, print out all those homes. In my example, they were $115,000 more but whatever your number is, the more qualified home prices are with that rent, print out those homes with the pictures.
[bctt tweet=”Rent a cheap home and use all the extra monthly cash to fund your investments or your entrepreneurial ventures. ” username=””]
Step eight, get the lender to show what the monthly payment would be on those homes. It should be the amount that you qualified first on your own. Plus, in my example, it was $600 rent but whatever your number is, it should be your original approval that you had, plus the rent number. That should be the new mortgage payment. Get that, print it up and stick it in a file.
Step nine and this is an important one. Gather up the information on your potential roommates. I’m serious about this. Show their rental history or their monthly income and expenses. Show that the roommate you’re talking about is not sketchy and semi-guaranteed to $600 a month that you’re going to tell your co-signers coming in. You want to make sure that looks legit.
Put Those Information In File
Step ten, take all that information, put it in a PowerPoint or a pretty binder and take it to your co-signer with your request. A little extra credit for you, step eleven, I suggest even showing a 3 to 7-year budget and plan on how you eventually want to put yourself in a position to take over the full payment with the roommate, either budgeting so you can afford it or increases in income, whatever it is that you have and so that you could eventually buy out your co-signer or simply remove them from the loan.
That is a proper house hack. The cool thing is if the person that you’re asking to co-sign, let’s say that you run the numbers and maybe they can’t help you co-sign. Maybe they’ve got their money tied up in other things. They’re not approved for it. Lots of times, if you end up showing them this much time, effort and thought put into your planning, who knows? They might offer to help out in other ways.
I’ve had people work this plan and they go, “We’re not going to sign for you but we’ll give you money for a down payment or we will give you that early inheritance.” Maybe they’ll say, “I’ll tell you what, as soon as you take the laundry off of it, you can have the pool table.” If the last five minutes of numbers and concepts were too much for you and you feel like your head’s going to explode, don’t worry about it. No stress.
It doesn’t mean you have to comprehend everything the very first time you heard it. Who knows? Maybe this isn’t right for everyone. Maybe you just heard about this. You thought it was a cool idea but maybe it’s not good for you or maybe you heard this and you got a light bulb in your brain. Remember that the light bulb is step one. You can go to HowToBuyAHome.com and check out this episode. Read and highlight this until all those numbers make sense. There are plenty of great ideas out there that you might never heard of but none of them work until you fully understand it.
Remember, I’m totally with you. The only thing I’m trying to sell you on is to sell you in your own belief in yourself and the fact that you have options. I’ve seen far too many people, including myself, rent for far too long and they end up missing out big time. You could be starting the road to financial security so much sooner than a lot of people do. You can still live your own life. You can do your thing while you’re also paying a mortgage and building a sensible financial base for yourself. You can do that all at the same time.
Bear in mind, when it comes to having roommates, house hacking and having people live with you, I don’t know you and nor do I judge you. I don’t care at all. I don’t know what your potential roommates or your crazy hippie commune lifestyle. I don’t know what any of that is going to be. You do you. Rock on but remember, you got to make sure that it coincides with city’s zoning laws.
You could have a home in your area that totally allows people to live in garages. That’s bitchin. You can stick all your friends you want in there. Knock yourself out. You can put tents in your backyard and make people pay you camping fees like a campground. I don’t care. You can buy a home. Qualify for it, get it, put a big circular bed right in the middle of the living room and rent nights to come to hang out with you. Swing and put that on Craigslist. It’s another form of income. Why not?
House hacking can be whatever you want it to be as long as you’re not breaking any community, city, county laws or ordinances. Speaking of that, I’ve got something that some of my buyers learned the hard way. If you’re one of those people with Airbnb dreams, I know a lot of people do this and they make a lot of money that way, that’s awesome but if you’re thinking you’re going to make bags of money by buying a home in 2021 or 2022 and then later on, you’re going to rent it out and make boodles and boodles of money, remember, the laws are changing on this. There’s nothing set.
What I have seen personally is the hotels are jumping in, lobbying with the cities, cracking down and changing these laws. They go to the city and explain how much tax revenue that the city is missing out by letting individuals rent their homes instead of hotels. We’re talking 10% tax on every hotel room and that goes right to the city. I know about this because I live near Disneyland. The city of Anaheim got hit hard by the hotels. The Airbnb rules have changed a lot. The same thing is happening in LA and New York, even by me at Laguna Beach and other tourist destinations. If you’re going to Airbnb, make sure you know the laws. Do not buy a home thinking that you’re going to be able to Airbnb it in five years exactly the same way that you can do it now.
[bctt tweet=”House Hacks: All you need is that upfront capital. You can get more of that by renting super cheap, and that’ll help fund your idea faster and get you to that wealthier place later on. ” username=””]
We’re going to discuss that second, most common house hack I was talking about. This is something people ask me about all the time. In episode 37, I talked with one of the readers who ended up buying his first home as a multiunit place. If you’re going to be buying a duplex, triplex or fourplex, those are multiunit places. You live in one of the units while you rent the remaining units. It sounds like a great way to build equity and start your dream of becoming a real estate tycoon. Some folks like it as a way to buy and rent the other part of the place, the other units or unit to their friends and family.
A lot of times, people do this as a family compound style, all these wonderful ideas and they can be done. The most important thing to keep in mind if you’re a first-time buyer is that this path is not the traditional path of a first-time homebuyer. A mindset change is a crucial right from the start. Let me put it this way. If you’re getting married and you go to a venue that does weddings regularly, a whole bunch of stuff is going to be predetermined easy and smooth. In the event, they’ll understand how it works.
If you go to a restaurant that doesn’t do weddings and you ask them to use the outdoor patio for the ceremony and the banquet room for the reception, can it be done? Totally but there’s going to be a lot of things that won’t be getting planned in a normal fashion and will take some extra work because it is not your normal venue.
I love this idea. I did an episode on it. I said, “It’s great.” I’m not trying to discourage anyone but be sure that you or all parties involved, whoever’s being part of this purchase realizes that this is more of an investment. It’s not that real-life fulfillment of the dream of owning your own home, going out and buying the picket fence.
[bctt tweet=”If you’ve got the hustle, go for it. If you want to invest in a property before buying your place, check yourself and your numbers.” username=””]
This is buying an investment, so you got to change your mindset. The style of the home is going to be totally different. The money needed and the type of loan that you can get that’s going to be different. Being a landlord and an owner is way different than being just an owner. If you and all parties are down with this, let’s talk about the buying of the property.
First, you got to understand you’re not buying from the family that raised their family in this house. All that personal connection stuff has gone out the window. This seller maybe never even lived in this property. You were buying from an investor who’s only been looking at this property on a spreadsheet. That’s the only way they see it, zero emotion. That’s how you got to see the other side.
I’m going to tell you to look at yourself. I’m getting deep. You are no longer an acute excited first-time homebuyer. You are only an investor buying a property from another investor with investor rules, communication and negotiation. Forget every HGTV show that you ever watched in your life. I’m talking all of it, especially when you see the couple that are deciding between the rest of the country home and with a longer commute for Joe or the cozy colonial right near public transportation that’s perfect for Jill. Forget it.
What’s the major difference is between an investor buyer, which you’re going to be if you decide to go this route and everything else that I talk about on all the other episodes for standard first-time buyers buying a second single property for themselves to live in. First and foremost, down payment, loan and interest rates are all different. The down payment and the interest rates are going to be higher. The loan is going to be probably a different product you could use when you’re buying your own owner-occupied property.
Remember, you’re buying like an investor. Investors don’t get government assistance programs. The assistance in assistance programs is to help regular people buy a home, not to assist landlords to build wealth. You can still use a low down payment. I had some folks who bought a two-unit property with an FHA loan. It was hard. With that, I’ll get into that in the other episode.
One thing you have to realize is you might be able to use some of those lower down payments or lower credit score loan products but the way it works out when the bank finds out that you’re going to be renting part of it, the rates are going to be higher. The requirements might change on the amount of debt that you can have and the minimum credit scores are going to be higher than if you’re just buying an owner-occupied place. That’s a place that you live in.
The best way to buy a home with low money down and a lower credit score to get the best interest rate, that’s buying a regular owner-occupied place using an FHA or a VA loan if you’re in the military or a veteran. It’s reserved for owner-occupied buyers that you live in. You are talking about this house hack that’s a non-owner-occupied portion of the property. Everything flips to investor minimums.
The guidelines, I can’t tell you what they are because they change all the time. I don’t know if by the time you read this what the down payment minimum is going to be because they change constantly. It could be 10%, 20%, 30% down. That’s going to depend on what a mortgage broker tells you based on, one, the time that you ask them but also, it’s going to depend on your debt and your income.
Remember, this would all change. The number one rule in real estate is the rules always change. The banks change their guidelines depending on how much they want to lend or how risky they think it is. That depends on the global economy and that change all the time. I don’t give a crap how your dad, your uncle or your neighbor bought a house years ago. I never care about that. It is not because I’m a jerk and think that the people in your life are stupid. It’s that it’s different.
God bless him. Thank you very much. It doesn’t matter. You shouldn’t care what happened years ago either. Heck you shouldn’t care what happened weeks ago. Your down payment is different. It might be that debt-to-income changes things as well. You might need a different debt-to-income ratio. Even with the different down payment, maybe you need a different credit score. There are so many variables. There’s no stock answer.
You and your unicorn mortgage broker have to run the application just like you’re an investor. There are some other things that are different when you’re buying like an investor and that is tenants. That’s all I’m going to say because unless you know everything about lease contracts and landlord-tenant laws, it’s not your realtor’s job to know that. You got to figure it out. Your realtor is going to help you buy the property. They don’t help you run the property or be a landlord. You either need to know everything about it, have an eviction or tenant lawyer unless you buy a vacant property.
If you do that, then you’re probably going to rent to your friends and family. However, I hear from my real estate attorney friends that almost half of the cases that they have on their desk are between friends and family. I’m not trying to discourage you out there who are doing the house hack that doesn’t make any sense. I’m trying to encourage those of you who this might be something exciting for you to do and you didn’t know about it or you didn’t know could.
It’s the same way that I try to encourage folks to stop renting and buy a house. You can build wealth faster when you stop paying rent when you buy in a standard owner-occupied sale. You can build it even faster if you understand all the gobbledygook that I’m talking about and you can position yourself for a house hack. Episode 37 features Kyle. He bought not just 1 house hack but 2 homes, his 1st and 2nd home all in the first year. It can work. I’m trying to make sure that you see all these concepts eyes wide open.
More with the duplex in multiunit property house hack. Forget everything you’ve ever seen on HGTV when it comes to the process of buying. Once you get approved and you’re approved as an investor, the process of buying, looking at the home, putting in the offer, negotiating the offer, closing the transaction, that’s all different too, nothing like Joe and Jill, whoever those examples where I made up earlier. For instance, looking at the property, you might not even be able to see it.
Around where I am in Southern California, a lot of times there are tenants in those properties because they are investments and they call them a drive-by-only. Sometimes the only way you can see the inside of the house is you drive by it. Then you put an offering on the house based on maybe the two pictures they have online, what you found on Google satellite and what you see other homes are going for and renting for in that area.
You put in an offer and then you pay out of your pocket for an inspector to meet you at home for the very first time that you can see it. You’ve negotiated the home and pay the inspector. You go inside and the place could be crap-a-palooza. I have no idea. You start renegotiating the price based on what you and your inspector find. It’s series investor-style buying. Sometimes they are showing the home before you write an offer. Oftentimes, the sellers are out of state and you have to hope the tenants are cooperative to let you in the house.
Imagine how happy the tenants are to show the home to the person that wants to buy the house possibly to kick them out or raise their rent. It doesn’t always go as smoothly as you would like it to. Figuring out what your deal is. Once you go through all of this, you’ve got to figure out if the numbers work for you what they call penciling out in the investment world. That’s a lot of extra work too.
You and your realtor are going to be discussing things like cap rates, rental rates, lease terms, cashflow and a whole bunch of other terms that happen in your area that might not be specific to my experience and what I’ve done with investors in my area. That’s why I say to you, “I’m just a guideline. This show is a guideline.” You need a true experienced local unicorn who wants to help a first-time buyer see if this is a good viable plan.
A lot of times, they’re talking to big investors about doing this, but if they want to help a good first-time buyer go through this, a good realtor is going to walk you through it. They’re going to see if it fits your overall goals because this is a bigger puzzle piece in a much bigger puzzle. If it’s true, it works out and you find a good unicorn that’s going to do this for you, they’re going to be a huge advocate for you because in the most basic terms, you’re going to be a returning customer.
I love working with investors and people who want to take this whole big picture stuff because I know you’re going to be buying and selling property for years and years. As much as I love putting someone in their forever house where they’re going to stay forever, that’s great. That person is going to refer me to other people but this person is going to be buying more and more. One of the other things about buying a house like this, house hacking into a duplex or multiunit, in my area, you should expect almost no repairs.
In fact, expect no repairs because you’re not buying a home that’s going to tweak up. If it gets to the right market value, you’re buying an asset and that asset is the price of whatever the market value is. The landlord, the owner at the time, they don’t care. They’re not going to work with you and figure out how much to do this and that. They expect that you’re buying an asset and you have the overarching landlord knowledge. If you see the house needs a roof replacement, he’s like, “I know that’s why I priced it here.” He expects that you understand all the minutiae of this. You understand that the home value of that property is minus what it would cost to put a roof on. They’re not going to spend anything.
Remember, you’re buying from an investor. They’re not going to put a dime into the property unless they get a dollar return. If you want to buy a duplex or a multiunit property, at least you know it’s going to be different but if you’ve never bought a home before, you’re not even going to notice the difference. What do you know? Go for it. Now that you know what it’s going to take, jump on in.
[bctt tweet=”Believe in yourself and remember that you have options.” username=””]
Those are the two most common house hacks. Maybe you’re young enough or tolerant enough to live with roomies. Maybe you want to try the first one. You want to try to buy at your max or get a co-signer for an even higher-priced house hack. Maybe you’re savvy enough to go for the multiunit place and become a small property landlord with a few units or maybe all this made you realize that you’re going to buy a house with a little extra room in the back.
“If I feel like it and we want to skip a month mortgage, we’ll charge them. I’ll tell our friends, my stupid sister or stupid brother to come over and crash there every once in a while, until we decide to turn that room into an office, a nursery or a big old closet for my sneakers.” Cool. Now you know and you have your options. Knowing is way more than half the battle in buying your first place.
That’s it for this episode. Subscribe, review the show and hit me up on HowToBuyAHome.com or Instagram @DavidSidoni. Especially if you’re looking for a unicorn in your area, don’t wait. You don’t need a unicorn at the minute that you’re ready to buy. You need a unicorn to help you get all the right moves together to help you plan to buy in 2022 or 2023. This show is for you. It’s to help you flourish. Help me out, review it, text it to your friends. If you don’t text this to your friends, you’re going to follow all this buy a house and be more financially secure than them.
When you guys go out later, you’re going to have to pick up the tab because they’re all still going to be renting, throwing their money away with no idea where they’re going to have their finances in the future. For real though, subscribe and share. I’m going to keep coming at you with more stuff to help you realize your dreams. You’re reading. You’re already ahead of the game. Let’s help others. Share it with them. Help people know what they don’t know. In that way, I can keep pounding this into everyone’s head. You can do this.
- Episode 37 – How One Listener Used The Podcast To Buy His First AND Second Home In 2020
- @DavidSidoni – Instagram
This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!
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