Bought a House Hack? Watch This Before You Do Anything...

Welcome back to another episode of the Roots Podcast. I'm Max Moore joined by my co-host Tyler Lingal. And today we're going to dive into the five steps right after you close on your house. If you just closed on a house hack, congrats. Huge step. You just upped your wealth status in life. But it's not going to be easy. You got to you got to set some fundamental things up. So if you find anything valuable, make sure to drop a like, subscribe, turn on the notification bell, take care of us for us providing knowledge to you. Tyler, what's the first step? What's most important right after closing on your house hack? First step is to actually move in. You don't want to commit mortgage fraud and not move in, guys. And go to jail for that. But move in. And I would say change the locks. You We've heard some horror stories. Yeah. It's like 75 bucks. Change the locks. Uh and then set up a simply safe. Even if it means just putting the sign in the yard and then stickers, right? As someone that I hate to say it does do that all the time, it works. Yeah. Just get that sign. Got to protect the spot. Got to protect the asset, right? What's next? Step two is going to be to set up your management software. I suggest using a platform called Rent Ready. We're not sponsored by them, but you can sign up through a referral link and get some money off uh using the link down below. That software has saved me hours and hours of time. Do not use Vimmo. Do not use Zel. Do not collect cash payments. You can collect payment straight through there. You can host host the lease. You can have, you know, e-signing and all of those things conveniently taken care of that your tenant can request maintenance items. You can like set up annual checks and things like that run back. Yeah, you can even post your unit for lease. And if you want suggestions on how to lease your uh unit for more money and quicker, go and watch a video that we've already posted. We'll throw that in the link below. Um, as well, moving more towards step three. So, really just set up that management software. Step two. Step three is understand your lease if a tenants's already in place. And if a tenants's not already in place, understand how to get your unit leased. I would suggest maybe talking to a property manager, getting some suggestions, going back to your buyer's agent that helped you purchase the property. Get some advice from a professional that leases properties often, credit score type things, um, and how to just properly vet tenants. If you're going to spend a,000 bucks on anything, getting a leasing agent is huge. I think honestly it's the right move when house hacking to just go on ahead and not try to save the dime there and get a trained professional. If they are going to self-manage, what are the screening if they are going to self-manage and not take that option? I want over 600 credit score, three times the monthly income. Uh, no scary things on the background check, no bank robbers, uh, no, you know, felonies, no, right? Nobody that wants to pay cash upfront. If your tenant wants to move in by the end of the week, tell them you'll go with somebody else because that means they're getting evicted from their current place. Um, just some of the things that we've learned and been bruised upon along the way. If you are inheriting a tenant, you need to get the contact to the property manager who was managing the place before. Even if that's the previous owner, we need to let the transactional walls come down because there's some information that they're going to have that you need, which is like notifying the tenant that the property has been sold. You'd be shocked how many times tenants have no idea, right, at all that the thing has just been sold. It's like, wait, who's my new owner? Who's this? Uh, if you were going to I I think this is the last the the last part of step three, which is introduce yourself to that person residing, your tenant. What do you think? Should you introduce yourself or not? Depends on the tenant, depends on the unit. The lower the income, this is going to sound bad, but I think it's justified. The lower the income, the more hesitant I might be. Yeah. Just given where their life situations at and whatnot. However, uh I think that if they passed your screening requirements and you live there, I would be in favor of revealing that and putting a name to a face and knowing their actions if they don't pay rent affect someone. Yeah. I think there's a healthy sense in that. I'm on that team. I don't want to play devil's advocate too hard and like go against it. I think you should be transparent and tell tenants who you are, that you're the owner, that you've got a mortgage to pay. The only place I would air with caution is you will be paying uh some maintenance expenses up front, which is alluding to step four, because there's going to be things not taken care of. Step four is to have a repair reserve ready. And the age-old question is how much? This one bites people in the butt who don't do this well and overlever and think, "Oh, I got cash flow coming in. I'm gonna be fine with my thousand a month I'm netting or whatever it is." Houses are expensive and have very expensive breaks. Let's start at the top right. We have roof foundation. That's going to be breaking down probably every 50 years, but roof is every 20. And so that's going to be from 10 to 15 to maybe 20,000 if it's a big property. Yeah. So, you need to have, especially if the roof is 10 years older, I would say the repair amount for a roof that may be extreme. Could be 12K. Yeah. 12K, right? And then going down to HVAC, that's like 8 to 10K to replace. Water heater about 1,500 to 2,000, so on and so forth, right? Um, my number is 10K per unit. 10. Yeah. Basic and easy. You're pretty much in the clear if you have 10K per unit. Yeah, I would agree with that. And right out of the gate, your tenants's going to have things that they're going to take advantage of the fact that you're the new owner. Well, the old guy said he would take care of this and we'd take care of that. Just take all the requests in. Use some discernment on what actually needs to be taken care of, right? Take care of it. Uh up. It's just upgrading your property, right? But because you are the new guy in town, they're going to want it. trick for me is I only text tenants with responding as my wife's name because they tend to respond a little bit nicer to females as opposed to males. They don't want to they really just don't want to disappoint Sierra. They want to pay rent on time. They want to be easy on the maintenance. I don't know. I maybe it's just the name of be a female. That's step six. No, just kidding. Uh step five is is start making improvements to your unit, your own individual unit. If you house hack, you should buy something that uh you're able to go and swing a hammer in, paint some walls, you know, do those $5 actions that, you know, result in $15 in return uh and and go take care of them. Change out doorork knobs. All these little tiny things matter uh in home value cuz you're only going to live there for 2 years. Remember that cuz you should sell this thing in 2 years or refi to move on to the next one to start building a portfolio or stacking wealth. It's been another episode of the Roots Podcast. Thanks for watching, tuning in, subscribing, liking, all the things. We'll see you at our next master class. Peace.