House hacking is a great way to start building your real estate portfolio, and it’s never too early to get started. My guest today took that idea to heart. Miller started his investing journey while still in college and is already settling into his first house hack in Colorado Springs.
- Listen to the podcast “#99: How This House Hacker Started Investing Before Graduating College” on the Colorado Springs Real Estate Investing Podcast
- Watch the YouTube video (at the bottom.)
- Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.
Learning about Real Estate Investing Early
Growing up in Mississippi, Miller’s parents owned a couple of rental properties. He’s been around real estate his whole life, and the seed was planted early to start investing as soon as possible. In high school, his personal finance teacher showed them Dave Ramsey videos, and he learned a lot about how to invest.
By his senior year of college, Miller and his now-wife were brainstorming where they wanted to live after college in Tennessee. They had majors that would allow them to move anywhere, so they decided to figure out where they wanted to live first and then find jobs.
They settled on Colorado because of general housing costs, and when they came out to visit, loved the beauty of Colorado Springs and how easy it is to navigate. Once they decided to make the Springs their home, they reached out to Envision Advisors to start looking for a house hack.
Finding the Right House Hack in Colorado Springs
They started their housing search in January 2022, even though they weren’t graduating until May. This gave them time to talk to me and lender Bill Rodriguez to figure out the best course of action while looking at homes simultaneously.
Because they didn’t have jobs yet when they started looking, it was crucial to talk to the lender early on to see what was possible. Bill told them he could pre-approve them once they got offer letters. Once they got the letters, he started the process and was able to get them a rate lock for 90 days with a $2K fee. That gave Miller and his wife time to start their jobs and then allowed Bill to offload the loan.
They looked at houses remotely, with investor friendly realtor Leah giving them virtual tours. Her honest assessment of the properties gave them confidence that she was more interested in finding them the right home rather than just getting a sale.
Single Family Home That’s Perfect for House Hacking
They found a single family home that has a great layout for a room by room rental strategy. It’s located in the popular 80910 area code and has 5 bedrooms/3 bathrooms. The main level has 3 bedrooms/2 bathrooms, while the basement has 2 bedrooms/1 bathroom.
This house is in great shape. They found some minor issues, such as a missing handrail and outlets that don’t work, but the total cost to fix everything is about $1K.
The basement is located right by the garage, so they were able to install a door off the kitchen to create a separate entrance. Miller and his wife decided to take the basement so they can have a private living space.
Running the Numbers on the House Hack
The house was listed at $425K, while Miller and his wife were pre-approved for $460K. There was one other private buyer competing, along with a rent-to-own company that made an all-cash offer. With Leah’s help, they crafted a strong offer—$460K, limited inspection objection, and a 15 day close. The seller really liked that Bill could close so fast, so they accepted the offer.
They got a 4.8% interest rate that was guaranteed thanks to the rate lock. By the time of their appraisal, rates were already up to 5.3%.
Two of the upstairs bedrooms rent for $800 per month, while the third rents for $750.
Currently, their expenses break down to:
- Taxes: $999 per year
- Insurance: $1900 per year
- PMI: $142 per month
- Utilities: $170 per month
- Internet: $60 per month
- Landscaping: $40 per mow
Using Creative Strategies to Make a Comfortable House Hack
To give everyone privacy, they installed electronic locks on the basement door and all of the bedrooms. The laundry is located in the basement, so Miller worked with the tenants to pick a three hour window for laundry each week. During that time, the tenants’ pin will work on the basement door, allowing them access to the laundry. This gives Miller and his wife advance knowledge that the tenants will be in their space.
Miller and his wife pay for utilities and internet while also providing basics such as trash bags and dishwashing soap. Having lived with roommates in college, they knew it would be easier to just supply these things rather than open the door for tenants to bicker with each other.
Long Term Plan for the Property and Investments
They plan to house hack this property for a year and then move onto the second one. When they move out, they intend to furnish the downstairs units since it would be difficult for tenants to move furniture in and out. They may be able to charge more for those units, but Miller is mostly interested in how a furnished room will affect demand.
Miller wants to house hack every year, ideally getting up to eight properties. After that, he plans on switching to a Nomad strategy. His hope is to have enough cash flow to replace their living expenses between years six and eight.
Once they reach that point, they want to step back from their day jobs and focus on apartment investing. In the meantime, they’re networking with other investors.
Connect with Miller
I think Miller is doing a great job implementing his strategy and look forward to having him back on the show after he moves out. In the meantime, get in touch with Miller to learn more about his investing plans and strategy. Send him a DM on Instagram @MillerMcSwain.
If you want help formulating your own investing strategy, reach out to me for a free consultation.
How This House Hacker Started Investing Before Graduating College
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