From Friends To House Hacking Partners!

    Alex and Kiersten started as friends and pivoted to house hacking partners! Find out how they were able to maximize their creativity to produce major wealth building benefits. 

    What’s The Goal?

    When Alex and Kierst reached out to The David Greene Team they had a few specific goals in mind:

    • Decrease the cost of living in the Bay Area (Oakland, CA to be exact)
    • Build wealth through appreciation
    • Cash-flow once they moved out

    Luckily, Steven Lam, real estate agent with The David Greene Team, knew just how to help!

    Narrowing It Down

    Steven and his team knew they’d have to look at potential properties through a creative lens to help tick off all the boxes for Alex and Kierst. They ended up closing on a single family home with 4 bedrooms and 2 bathrooms.

    Of course it wasn’t always easy. Alex and Kierst ran into issues with landscaping, issues that come along with an older home (Alex and Kierst recommend saving double what you think for repairs to avoid headaches), and limited parking for tenants. They were able to problem solve each of these things though to keep the ball rolling with their investment.

    Here’s where some of the creativity kicks in. The home is able to be split to create TWO units. Downstairs would become 2 bedrooms/1 bathroom and upstairs would become 3 bedrooms/1 bathroom.

    Alex and Kierst had the ability to rent out the bottom unit (and still have that option for the future) but decided to house hack immediately by doing the room rental model! Each of them is only paying approximately $600 a month with this strategy. Let’s dive into the numbers next!

    Numbers Deep Dive

    Let’s start with the basic numbers to purchase the property. In total, Alex and Kierst came out of pocket $67,750 to close on this deal! They were able to get it done by each only being responsible for $33,875.

    Next comes the expenses. Alex and Kierst accounted for their total monthly expenses being around $4,713. With house hacking, they knew that their tenants would help pay a big chunk of that every month.

    Moving on to the most exciting part! By using the room rental strategy, Alex and Kierst are able to bring in a total of $3,350 each month. That means they each only have to come out of pocket $682 AND they get all of the benefits of owning a home. By being flexible and creative, they beat getting stuck in the rental cycle and now own an asset in one of the most expensive markets in the country.

    Being a savvy investor means looking beyond how the numbers look on day 1. Looking ahead to when they move out and rent all of the rooms, Alex and Kierst will be cash-flowing $18,000 per year! Not bad for investing in an appreciation market!

    Final Takeaways

    By keeping their 3 initial goals in mind, Alex and Kierst were able to accomplish each one. These friends did the uncomfortable things needed (partnering with a friend, finding a property that could do well with room rental or separate unit strategies, and sharing their space with tenants) which helped them land their first investment! Congrats Alex and Kierst! Steven Lam and The David Greene Team can’t wait to help you do it all over again.

    Latest Articles

    Behind the Shine 03/01/24

    Behind The Shine 2/9/24

    Behind The Shine 1/19/24

    Behind The Shine 1/12/24

    Related Articles

    Leave a reply

    Please enter your comment!
    Please enter your name here