The House Hacking Strategy with Craig Curelop | BiggerPockets Money Podcast #95

www.biggerpockets.com/moneysh...
One of the most commonly asked questions in the BiggerPockets Forums is “How do I get started investing in real estate with no money?” Craig Curelop has the perfect answer to this question - House Hacking!
Craig shares his own story of three house hacks - and counting! We dive into the numbers, look at what makes a good property to house hack, and even talk about the different ways to hack your housing.
Craig also shares ways he dealt with people who didn’t understand what he was doing - including his family and most of his friends.
Craig even shares his biggest house hacking mistake - how not following his tenant screening protocol led to a terrible experience.
If you’re thinking about jumping into house hacking, this episode lays it all out.
Check the full show notes here: www.biggerpockets.com/blog/bi...

[@Sectionmillionaire-fg8mm]

My first house hack was the best move ive ever made. My only regret was not doing a 4 unit vs my duplex.

[@PassiveIncomeTom]

Nice work!

[@michaellopez1670]

What were the #s

[@SucceedREI]

Agreed! For those who want to scale their rental portfolio while taking advantage of the favorable owner-occupied financing, the advice should be start with a 4-unit (if possible in your area) and then move down from there. This is because lenders won’t finance your purchase if you try to go from a single family to a 4 unit or 3 unit or even from a duplex to a 4 unit or a 3 unit. There are Fannie Mae and Freddy Mac guidelines that basically say that the borrower’s move from one owner-financed property to another has to “make sense” i.e. be an “improvement” to their living situation. Unless you can provide some compelling reasons, they will view a move from a duplex or a single family to a larger multi unit bldg as a “downgrade” and the underwriter will deny your loan application.

[@Untryn]

Personal Notes: Tip: always pay for PMI (personal mortgage insurance) if you’re DP is lower than 25% - he did FHA, bought a duplex, rented out the top and ABNB the bottom where he was living - ABNB might have short term tax rules - make sure you can rent out your rooms in your county. Occupancy Laws - find property manager that does rent by the room * to find them just keep asking prop managers if they do it - there’s a spectrum of Comfortability ~ Profitability. You’ll have to work hard & get out of your comfort zone to scale up. When you start out go high on the profitability side of the spectrum, that way in a few years of grinding you’ll have the freedom to make more moves. - what to look for: single family: sq footage, beds, bath for price each. Compare a lot of properties & get a feel - warning: “at every point in this journey you’ll never be like your peers” “ be prepared to be different and get flak for doing so” - biggerpockets conventions held in Nashville - to keep growing continue to save & be frugal - screen tenants, background check them like they could be a criminal - his book is “house hacking strategy” - know that the first property you’ll deal with vacancy, fixing up a lot of things. But later on you’ll see cash-flow & especially when you get a second property - always have back up money for expensive because you will need to pay for expenses. ~10k-15k *book millionaire next door - don’t be afraid to jump in, don’t be paralyzed by trying to find a home run deal. You want to start asap

[@anthonycarter6112]

Just purchased The House Hacking Strategy today . The last copy in store was up in Augusta ME. Very excited to learn and teach.

[@kcdav7]

I’m currently house hacking. I own a 2 bedroom single family with a bonus room. I currently have 2 renters per room. I’m working to get the bonus room rented too. I would like to purchase another house next year. Ok so here’s my question to you: 1. Should I keep everything personal or open an LLC? 2. I used a conventional loan with 5% down. To buy my home. Will a bank give me another mortgage even though I’m house hacking? How will they verify the income?

[@performoutdoors]

1. Unless you plan on going with commercial/private/hard lenders, personal is fine. Though I would get legal advice for info regarding your specific area. 2. Lenders will use a specific percentage of your rental income and add it to your personal income when giving you a pre-approval. The amount depends on your lender; for example, my lender considered 50% of market rent in my rental units as part of my income when purchasing my duplex. That was for pre-approval, so I didn't even have the place rented yet.

[@kcdav7]

David Capstick Thanks. Let me ask you something else about question 2. The home I purchased is on a conventional mortgage and I used 5% down with owner occupancy for 1 year. When the year is up, how would I be able to buy another home and not have the current mortgage affect the new mortgage? Do I provide like a ledger of rents per bed to the mortgage company?? Also, would you have renters sign contracts to rent beds?

[@performoutdoors]

@@kcdav7 I'd recommend having leases for anyone renting from you in case you are required to prove that you have the rental income you are claiming. Most banks require 3-month's (or something similar) bank statements anyways, but if they don't accept it as legal income then you're debt-to-income ratio is going to be affected, potentially causing problems when you go to get a second mortgage.

[@sweetdiablo777]

Thank You guys, great info and that book is a -Must Read It- book

[@MarcoLiedekerken]

I am preparing for doing a house hack in The Netherlands. Thinking about buying a single family (3 floors, 4 bedrooms, 1 bath, 1 common room, no garden) small house and rent it to 3 students (and 1 room for me). I probably will pay cash (€180.000) for the building, because I have no job (so no second mortgage possible), but currently rent out a luxury 1 bedroom apartment (with first mortgage). As a frequent/full time backpacker I think the 20 year age gab between the students and me is no problem during the time I stay there. Questions: 1) What would be the perfect specs/layout of the building to implement my (student) house hack ? 2) What is the best period of the building to have been build (1980s ?) ? 3) What rent pops up in your mind for the (three) 12 m2 student rooms to justify the purchasing price ? 4) What tips would you give me, given my situation (I am flexible in everything) ? Thanks, Marco #boughtyourhousehackingbookviaamazonuk

[@eugenberzani1216]

hello Marco: where do you find information about loans and everything else?

[@jonardlopez5019]

Is a garage conversion a good strategy?

[@Sectionmillionaire-fg8mm]

If you were to house hack as a first time buyer, would you buy under a llc or personal? im having a hard time transferring title to an llc to minimize liability.

[@SucceedREI]

Hey, attorney and real estate investor here. You can’t buy in an LLC if you plan to house hack. This is because the house hacking strategy entails getting an owner-occupied loan which is governed by Fannie Mae and Freddy Mac guidelines. Those guidelines only allow issuing of owner-occupied loans (which have favorable financing) to individual borrowers. Not LLCs.

[@Paul_Sullivan]

I just got approved for a VA loan zero down and found a 4bed 2bath SFH near a university for 40k!

[@njm543]

Purchased The Book!

[@SteelerNationBaby]

Wise smart good people...ty ❤

[@joseencarnacion7625]

Am learning and planning on doing house hacking next year I hope i can do it am not looking into getting passive income at the start but i want to live for free at least the first couple year

[@kerrypangan5236]

How was he able to go to the bank a year after buying a house? Or does he go through a private lender? Pretty awesome journey

[@cliffordthecowboycloserwal4540]

I love this! I plan on doing a house hack next year

[@PassiveIncomeTom]

Sounds like a great plan Clifford!

[@BladesForFury2090]

It's been a year since your comment. I hope you did it:)

[@joelhinojosa6838]

Good interview 2 weeks ago, a little repetitive so soon. But I do love the show.

[@ianscianablo8507]

Love that book Craig!! OMG!!! But I want to buy my first BRRRR and I'm in a small upstate NY town. How do I get a mentor on such short notice? I want so badly to purchase my first house and do an Owner Occupied loan. What do I do NOW? I have FOMO! LOL!!!

[@SucceedREI]

Hey Ian. I’m an investor in upstate NY. My business partner and I scaled our portfolio to 150 units using the BRRRR strategy. Where in NY are you investing?

[@sidney8586]

I never found the photo of the cardboard box D:

[@The_Vangster]

Andrew Yang 2020 for BRRRR

[@asishbalu2415]

Let's hope

[@deontaeposley8682]

conventional owner occupied for multi family is 15% down

[@deontaeposley8682]

Travis Williams where do you live ?? Lol

[@deontaeposley8682]

I heard that was a good market ! Is your bp name Travis Williams ?