House Hacking: Lets You Get Your Housing For Free

This Hack lets you get your housing for free by having someone else pay for it, house hacking. investment, property, rental, rent, life, hacks, invest, fixer, upper, income, property http://jessicacoaches.com/2017/05/house-hacking/ ‎
This Hack lets you get your housing for free by having someone else pay for it, house hacking. investment, property, rental, rent, life, hacks, invest, fixer, upper, income, property http://jessicacoaches.com/2017/05/house-hacking/ ‎
This Hack lets you get your housing for free by having someone else pay for it, house hacking. investment, property, rental, rent, life, hacks, invest, fixer, upper, income, property http://jessicacoaches.com/2017/05/house-hacking/ ‎

No, this is not about marrying rich! This is a real solution to make living expenses more manageable, or even make money. And while this is not about getting a sweet sugar mama or daddy to pay your rent, it is having someone else pay for it.

Your renter.

What I’m talking about is commonly referred to as House Hacking. House hacking is when you buy a property with the intention of renting out units or rooms to people to pay for the property. The HGTV show Income Property often makes a reference to this when people are making a rental unit in their basements and such.

 

If you are in need of more immediate housing solutions, I would like to point you to https://portal.hud.gov/hudportal/HUD?src=/topics/rental_assistance

 

I have been house hacking for the last six years. What we do is purchase a home, we have a family, so we aim for multi-unit homes. We keep the property prices low as we don’t have a huge income and have lots of skills by buying fixer uppers, usually living in the unit we are fixing up. Right now we are living in a duplex, in the larger of the two units: a three bedroom two bathroom. The other unit is a two bedroom 1.5 which is completely separate is paying the entire mortgage. Pretty sweet right?

Related: How I never have to pay another penny for my retirement at age 34 on a 30,000 per year salary!

It gets better, once everything is fixed up we find a new property and do it all again, renting out the other property fully.

Examples of house Hacking situations:

–  Buy a 3 unit property, live in 1 and rent the other two out.
–  Get a large single family home with four bedrooms, you live in one bedroom and rent the others out.
–  Purchase a house with a guest house or basement that will function as a rental to help cut costs on your large residence.

Pros:

 

House Hacking allows for low-income investors to squeak into the investment property world. This is because the rental property will qualify for owner occupied loans with down payments of 3.5%-5% as long as it is four units or under.

Related: How to Buy a Property With No or Low Money Down!

It can lower your expenses, allowing you to save more money to invest in yourself. I do love it when other people pay my mortgage!

You are close to your tenants, so they tend to behave better, it is also convenient being your property manager allowing for more profits.

If you buy a fixer, you can live in a unit that needs to be fixed up and slowly do the renovations. No driving to the site. No lapse in rent during a renovation. Improve slowly, or by the room, as you have the money to do it, the only one who has to suffer a construction zone is you.

house hacking construction zone

Cons:

You will be living next to your tenants. For some, this can be awkward.

You may be giving up the privacy that having a whole lot between you and your adjoining neighbor provides.

Have you ever lived in a construction zone? While amazingly rewarding, there is nothing like building something to make you feel accomplished. It is stressful. There is always something to do.  In fact, that half done project might be right in front of you while you are trying to get some relaxation in. It also always tends to take longer than you expect!

 

Advice for first-time house hackers:

If you are going to get a fixer upper, and do the work yourself, try not to be too ambitious, stick to surface problems and properties that do not need to be gutted.

Get rid of your mortgage insurance by forcing appreciation with improvements. You can do this once you feel you have 20% equity. You can either refinance or try to get a reevaluation from your current lender, and they will likely want an appraisal.

Just because you are living in the home does not mean the numbers do not matter! Plan for possibly turning it into an investment property in its entirety. You still want a cash flowing property. When evaluating net income just use a fair market rent for the unit you will be living in.

 

Do you Have any experiences house hacking?  Would you recommend it?  Planning on trying it?

How to get a high paying job with no debt involved!

How to Get a High Paying Job No Debt Involved career, tuition, cash. scholarship, cheap, student, loans, university, money, budget http://jessicacoaches.com/2017/04/how-to-get-a-high-paying-job-with-no-debt-involved
How to Get a High Paying Job No Debt Involved career, tuition, cash. scholarship, cheap, student, loans, university, money, budget

I like options! When I graduated from High School I had pretty much been told you are going to languish away in a food services job or go to college for a four-year degree. I was also told there were three routes to do this, rich parents, debt, or scholarships. However, it turns out some food services jobs pay more than the job you might get after four years of studying.   There are also so many more options to get a good career and so many more routes to get you there without going into debt!

***Note: I am a strong proponent of the gap year, where a person travels for a year after high school so they get an idea how the world works and how they would like to fit into it.  It does not have to take a lot of money to travel.  If you are interested, check out: 9 Tricks to Make Travel Cheap!

High Paying Careers with Training Included

 

-Apprenticeship
Want to get paid to go to school? It is possible. Apprenticeships, often called the other 4-year degree are an oft-overlooked program. How it works: You start off as a paid apprentice in a field, you work a regular work under more advanced workers, slowly advancing, there is usually some course work they will provide, you advance in the program, usually gaining in wage and title until you are considered at Master. A good place to start is the United States Department of Labor or a simple google search of your area apprenticeship programs.
Not limited to:
Electrician: 60-70k a year
Lineman: 70-100k per year
Plumber: 50-60k per year

 

 

-Sales
Sales is a career path that does not take any education to enter, minus some states which regulate Real Estate Sales, but even that is small. The pro and con of it are all based on you and most of them are commission based. There is uncertainty in the beginning, and for some used to getting a steady paycheck, it can be a difficult adjustment. Once you get experience and a proven track record, you will always be able to find a job, some positions up the food chain even have base salaries plus commission.
Salesperson: 0 – ???k per year

-Become a Driver
While not in the highest earning income bracket, this is a very good wage for no experience and they often will pay for you to get your Commercial Drivers Licence so you can do the job.
School Bus Driver: 30 – 40k per year
Semi Driver: 30 – 65k per year
Heavy Equipment Driver: 50 – 70k per year

 

 

-Emergency Services
While these careers arguably deserve to be paid much more, they are a well-paid profession that requires no education with all training provided. There are also many unseen benefits to belonging to the emergency services groups that do not come in the form of salary.
Firefighter 30-80k per year
Police Officer 40-85k per year
Emergency Dispatcher 20-45k per year

-Start your own Business
The range in this is huge, from people never getting off the ground to people making millions. This is where the buck stops with you, so your motivation will determine if you fail or succeed. Some inexpensive ways to venture into owning your own business are a service based industry. You can freelance any skills you may already have like writing, designing, tutoring, or photography.
Business Owner 0 -???k per year

 

I want to go to school for **INSERT CAREER** but I don’t want to go into debt what are my options?!

***Note: Please make sure you will find the career worth it, many degrees today don’t really get you very far. Also make sure it is something you will enjoy, try to shadow or volunteer in your field to get a better perspective of what life would look like. For a Top 100 list of jobs factoring in more than just salary see: http://www.careerprofiles.info/top-100-careers.html

-Get a job at a university for free tuition
At many educational institutions if you or an immediate household member work a job eligible for benefits you get an education for free. Many large colleges have all sorts of entry-level jobs that are benefits eligible.

-Get a job that will pay for your education
Some companies have benefits of paying for their employees to get degrees in related fields. Make sure to check your benefits packages to see what you might be eligible for. There are also some companies that will pay off your debt with a commitment to work for them, again this is by the employer so make sure to look for it.
Monster.com 5 Top hospitals that will pay for your education
businessinsider.com Companies that will pay for your tuition

-Get a scholarship when you pledge to work for an underserved population
Medical professionals can get $50k or $120 in scholarships depending on the level needed if they make a commitment to work in an underserved community for two years. More info: https://nhsc.hrsa.gov/

 

-Scholarships
There are a ton of scholarships out there if you are willing to apply for them. Some are more complicated than others. More info: https://www.studentscholarships.org/

-Attend a school that will not charge you a tuition
Yes, they do exist. Some do this to promote specific occupations, religious teachings, or to offer free programs to low-income students. A great resource is: http://affordableschools.net/20-tuition-free-colleges/ however, it is an incomplete list, there are others. Make sure to check any schools you are interested in for programs they might have.

-Military
If you have served in the military or it is something that would interest you, there are programs for education assistance after you have served. See: http://www.benefits.va.gov/gibill

 

Did I miss any?  Have you been in any of these professions or used these techniques? Were they worth it?

Are you tired of worrying about money?

Tired of Worrying About Money, early retirement, passive, income, cash, fiancial, freedom, fiances, flow, help, 50%, paycheck to paycheck, broke, ready, for, change, 401k, investment http://jessicacoaches.com/2017/04/are-you-tired-of-worrying-about-money
Tired of Worrying About Money, early retirement, passive, income, cash, fiancial, freedom, fiances, flow, help, 50%, paycheck to paycheck, broke, ready, for, change, 401k, investment http://jessicacoaches.com/2017/04/are-you-tired-of-worrying-about-money

When did struggling to make ends meat become the norm? Why do we never have enough money? Headlines raced across America recently about the dire situation we are faced with.

According to HomeServe USA:

  • In America 50% of people are unprepared for a financial emergency.
  • 1 in 5 (19%) Americans have nothing set aside to cover an unexpected emergency.
  • 1 in 3 (31%) Americans don’t have at least $500 set aside to cover an unexpected emergency expense.
  • In a different survey by MetLife, they found that 49% of employees are “concerned, anxious or fearful about their current financial well-being.”

(Source: MarketWatch.com)


That means 50% of people are living paycheck to paycheck in America.

For those 50%, I would like to tell you that this is not how it has to be.  In fact, I would like to tell everyone toiling away with no plans of retirement or even those who want to take the standard age 65 retirement.  That not only can you survive but can thrive! You can even retire early if you want to!

There are 4 Parts to Freedom!

There are many ways to reach financial goals and everyone has different views of what they want their lives to look like.  People who lead you to believe that the only option to success is their proven method, or by buying their product are lying! The main goal is to be better off tomorrow than you are today, try to at least do something on the list, and if you want to never worry about money again, do all of them.
 

Part 1. Lower your cost of living.

Take a hard look at your life.  Are you working for your needs or your wants?  The first step to never worrying about money again is to lower the baseline amount of how much you need.  I spent a year owning only the contents of one backpack, nothing else in the world.  It was freeing.  It was just me. I went to a country where the dollar went further, and I was thriving on less than $500 a month.  Now I am not suggesting to you to go to these extremes.  I only use it as an example of what is possible.
Don’t look at this step as a negative impact on your life, getting rid of things that hold you down only allows you to rise.  Also, if you need less to live, you need less to retire!
If you have never written out a budget to get an idea of how much is going and out and where of your bank account, Mint.com is a great place to get started, and it is free.  It also has a net wealth calculator built in.

 

Ideas:
  • Sell your car, move to a small apartment near your work that you can walk or bike to.  Not only will it save you money it has two things that will improve your life, exercise and shorter commute time!
  • If you feel you need a car, make sure it makes financial sense! Do not finance a vehicle.  Buy a cheap one, in cash.  See: How to get an amazing deal on a car!
  • Buy a home with multiple units, so your other units cover all your housing costs.  See: House Hacking: Lets You Get Your Housing For Free
  • Sell any large asset that is not making you money if at all feasibly possible. That means the huge house you are filling up with useless stuff.   That means the car worth over $10,000 is gone.  Unless your net worth is over a million, these cannot be considered reasonable.
  • Cut down any monthly expenditures you can, find a cheaper cell phone, pare down to only one entertainment source, call all your current providers and see if there is a way to lower your bill, don’t eat out as much, cut out as much frivolous spending as you can.

 

Part 2. Increase the amount of money you are earning.

 So let’s say you get through Part 1, you have reduced your cost of living substantially, and you are still struggling to keep your head above water to live let alone to invest or pay off debt.  It is time to increase your baseline income, find a better paying job.  If you get through Part 1 and you’re looking like you are going to be able to make a lot of motion with your ocean, it never hurts to get a little more and get that tide a little higher.

Further Reading:  How to get a high paying job with no debt involved!

 

Ideas: 
  • Ask for a raise.
  • Look for a new job in your same field.  Find someone who will pay you more, use that current job to leverage you into more money!
  • Get a second job.  Or, if there is a spouse at home consider them taking on a small job while the main breadwinner is home.  I  don’t advise this just for life quality, but it is an option for speed, or if the situation is dire.
  • Low earnings in your field? Switch it! Look for paid apprenticeships in construction, like plumbing and electricians.  Jobs which provide their training like Emergency Services (police officers, dispatchers, firefighters.), or drivers (Truck, School Bus, Boat.) which often train you to get your Commercial Drivers Licence (CDL) which can be a huge money maker.  See: How to get a high paying job with no debt involved!
  • Go back to school.  This can be a rough one.  First, the earning potential of the job you will get from going back to school has to be very good.  Make sure that one year of your projected salary can cover your whole debt incurred plus any lost income you could have been making during the time I took to complete it. Make sure to shadow your projected career, or find some volunteer job around it to see if it is a fit for you first.  There is nothing worse than incurring a bunch of debt only to hate what you got out of it.

Part 3.  Kick debt in the teeth.

I am not of the opinion that all debt is bad.  Would it better to have no debt, YES! But, I believe in the power of leverage.  Using student loans to leverage you into that job that makes you much more income.  Using mortgages to get you into and possibly renovate an investment property that yields cash flow after all expenses.  Getting a small business loan to grown your company and your earnings.
The key for those is the end goal must be worth it, and you must complete the task the loan allowed you to do.  You have to be getting more out of the debt then the lenders are getting out of you.
Consumer debt is typically the anti-thesis of being financially healthy.  This includes cars, credit card debt, any debts that are not currently making you more money than the interest they are charging you.  You cannot do Part 4, investing in yourself while you have consumer debt, the interest they are charging simply cancels all gains you are getting elsewhere.

 

Ideas:
  • Cut up your credit cards or make them inaccessible to yourself.  (I’ve heard of people freezing them in ice and keeping them in the freezer.)  I do not advise canceling them because it generally does not help your credit score.
  • If you keep unfreezing those cards, it is time to have none at all.
  • Don’t sign up for credit cards for the free rewards or discounts, especially if you have a track record of racking up debt.  There is a reason they do these incentive programs, they more often than not get more out of you then you will get out of them.
  • Attack your highest interest charged debts first for the most results, attack your smallest balance debts first for the most motivation to keep going.
  • Have a ton of debt, and you can’t even get a handle on the monthly payments?  Even after Part 1 and Part 2? Consider moving the debt around.  Some cards will do balance transfers and give you a flat low-interest charge up front by adding it your balance.  Only do this to debts you are sure you won’t be able to touch for the period it is held for because you are working on others.  Wait that didn’t work, not enough wiggle room to move it: have some other large asset?  Look into selling that asset to pay your debt off or getting a loan against it at a lower interest rate.  No assets? Maybe it is time to consider bankruptcy.
 

Part 4.  Invest in yourself. Diversify your earnings.

This Part is the fun one! Make sure that you are good with Part 3 though before doing things on this list unless you can manage to do them for no money or debt!  If your goal is truly not to worry about money make sure to build up a buffer in a liquid, interest accruing account like a money market fund of at least 3 to 6 months of your current expenses.  Remember the more sources of income you have, the less impactful losing one is, so diversify!

 

Ideas:
  • Start your own side business, this can be anywhere from starting a blog, to a service like consulting or tutoring.  Remember to start small and scale up with success try to grow from your earnings!
  • Make sure you are matching any employer contribution into your retirement account.  
  • Invest in the stock market.  If you like your field of employment and enjoy going to work, ramp up those retirement contributions and also invest in IRAs.  If you would rather retire early, invest in index funds and dividend stocks.
  • Get an investment property.  Investment properties can be a really strong contributor if you would like to retire early as it can quickly push you into gaining passive income.
Further Reading:

How to Create Real Passive Income!

How to create real passive income, real estate, investing, investor, cash, flow, financial freedom, retire early.http://jessicacoaches.com/2017/03/how-to-create-real-passive-income/

(Background of image property of 401(k) 2012)

Let me first start out saying this is not an affiliate link bank; I am not going to tell you that doing all your searches through Bing or Swagbucks, or all your shopping through iBotta is passive income. Because it is not! Those are just incentive programs, to do your shopping through them, or to actually do work for them by building their businesses. Passive Income is income that does not come from trading your time for money; it is something that is sustained even when you are taking no actions. However, that does not mean there is no work involved!!!! Let’s get this straight; there is no such thing as money without effort. The closest thing is government cheese, but you still have to jump through a ton of hoops, live a very modest life, and be reliant on someone else. Passive Income streams tend to have a lot of work up front that yield a slow stream that takes only a negligible amount of time and maintenance later.

Stock Market: Dividend Stocks, Index Funds.
The key for passive income in the stock market is only to take the interest accrued out or dividends. Dividends Stocks are single company stocks that have a good track record of growth in the value of the stock as well as give little kickbacks called dividends. The key with the stock market as a passive income is that you do not remove the money that is generating the interest or dividends. The catch for this is that it takes a significant amount of cash (Work) to make any real life changing amounts here.

Real Estate: Rentals, Owner Financing, Lending.
The best thing about this category is that it all works together to allow for a lower point of entry. The bad part is it takes a long time or a lot working with many balls in the air to switch over from the person paying mortgages payments to the person receiving the mortgage payments. There are also so many different options for investing within the Real Estate industry. The baseline rule is getting someone downstream of you in the world to pay you a consistent cash flow.

Related: 4 Ways Real Estate Investing Could be Making You Money Right Now!

How to create real passive income, real estate, investing, investor, cash, flow, financial freedom, retire early.

Businesses: Franchises, Self Startups.
These take a lot of upfront work and time; businesses vary widely from restaurants to vending machines to small-scale blogs. Your imagination and motivation is the only limitation. Entry point can be very low like a blog or require significant capital such as a franchise. For passive income, the goal has to be generating enough income that you can hire people to do all the work and still yield an income.

Creative Royalties: Inventors, Authors, Musicians.
Usually taking a great deal of upfront work and marketing before any returns are seen. These once they are created passively create income. How much income mostly varies on quality, quantity, and marketing. For this not to be a business you have to hand this off to someone else such as a record company or a publishing house.

4 Ways Real Estate Investing Could be Making You Money Right Now!

4 Ways Real Estate Could be Making You Money Right Now! Investment Properties, Rentals, Landlors, Cash Flow, Passive, Income, Appreciation, Leverage. http://jessicacoaches.com/2017/03/4-ways-real-estate-investing-could-be-making-you-money-right-now/

“People always need a place to live.”  This was a statement made by my real estate investment mentor.  He had been a real estate investor from the age of 20; he tried all manner of operations, land to single family homes; commercial store fronts to multi-family housing.  Slowly and steadily he weathered the economic climates, and he worked his way to an early retirement at 45.

Countless people are investors in real estate, some small like me who own only seven units, some big who own apartment complexes all over the place.  Some passive who have all their properties managed by someone else, some active who play the role of the property manager.  Real Estate should be in your portfolio.  When held for long times it is steady.  When leveraged the return percentages can be very high.  When fully paid off they are an amazing constant source of income.

An investment property is one that is purchased with the intent of making money.  Your home can build net wealth, but it is not an investment property unless it is multi-unit and you are renting the other units out.

 

1.  Leveraging yourself into a fortune.

Loans are still available at historic lows in the United States, when you compare our rates to the 15% of times past our buying power is stronger than ever.  The advantages of using a loan to purchase real estate are you can take a smaller amount of money to purchase a large asset that yields more money and which puts more money in your pocket every month.  It allows the little guy to get into the game and get great returns.

See:  How to Buy a Property With No or Low Money Down!

 

Rental Investment Properties Rate of Returns Why Two Houses is better than one, the power of leverage

Click to Enlarge.

2. Tax Deductions.

There are three ways to get tax deductions on investment properties.

  • Operating Expenses, these include but are not limited to property management, water bills you pay for the property, and repair costs.
  • Interest on Loans, your loan company will send you a tax form at the end of the year, and it will be a tax deduction.
  • Depreciation (Cost Recovery), this is only for investment properties, not your personal residence, this is an incentive from the government.  This tax incentive is to help counteract the natural wear and tear your investment receives. They deem the economic life of a property to be 27.5 years; the deduction is the properties purchase value divided evenly over that time per year.

 

3. Appreciation.

Real Estate does not have a static value, it changes with the market and time, however, over time almost all real estate in the United States has gained a great deal of value. This is a wonderful thing because it means that for long-term property investment keeps up with inflation and has the potential to yield you a great deal upon sale.

Two things of note:

  • When you invest only for appreciation short term, you are moving into a different investment strategy of speculation.
  • There can be significant capital gains taxes on home sales; please seek advice from a tax specialist for more details on this.

real estate rentals property investment passive income

4. Cash Flow.

This is my personal favorite of the four ways I am making money from real estate right now.  Cash flow is the reason people call Real Estate investing a passive income, and I would personally call it a mostly passive income.  Cash flow is the money that is generated from your asset in excess of the costs.  I use a conservative estimate of half of your rent going to losses, repairs, vacancies, and costs.  Many people use this to pay off additional on the mortgage, save for another investment, or just fund their life.

 

Are you ready to buy an investment property?  Get PreQualified before you talk to a Realtor!

Pathway to Financial Freedom Report!!! -Q2 2017

Income Report pathway to financial freedom report passive income investment real estate rentals travel full time http://jessicacoaches.com/2017/03/pathway-to-financial-freedom-report-q2-2017/
My family of five are on the road to financial freedom.  What that means to us is Mr. and Mrs. JessicaCoaches will no longer have to work time for money jobs!  Our goal is to get $2500 in cash flow and a nice cash buffer so we feel safe to say goodbye to the 9 to 5 and hello to more freedom and traveling!  This does not mean we will not be working, just that we get to choose what we do and where we do it.  We have done this on a very modest income, clawing our way forward, buying fixer upper properties, living in them, fixing them up ourselves, and then renting them out.

 


Rental A: 890/month average cash flow
Pros: Very hands-off income, fully managed, vacation rental allows us to stay there too.
Cons: Income is very variable and sporadic, get left holding a lot of bills while waiting to get paid.  Home is fully paid for and at peak earning capacity for us as we do not self-manage it, equity could be better spent elsewhere.  We likely over improved this rental.
Plans: Sell, possible owner financing, or finance to place equity elsewhere.

 

Rental B: 140/month cash flow
Pros: Very hands-off income, fully managed.  60k from being fully paid off and at that point will be looking at 1000/month cash flow unoptimized.  No vacancies in 5 years, rents a little low due to this.
Cons: Looking at some renovations when current occupants leave.  Could be making higher returns on money invested in another place.  Needs some improvements in order to refinance or sell.
Plans: Hold.

 

Rental C: 995/month rent no cash flow as we are living and finishing up renovation in main unit.
Pros: Best returns on investment, potential 82% cash on cash return.  Looking at 550/month cash flow when both units rented out and managed.  200k to payoff and 1750/month cash flow.
Cons: Still needs some more work, need to be careful not to over improve.
Plans: Hold and rent fully when we leave.

 

Blog: No Cash Flow, in negatives I do not wish to calculate out yet! ( I think I made $0.27 cents on my sidebar ad.)
Pros: Great growth potential, really learning a lot.
Cons: Quite a bit of time for no upfront rewards yet as I am new.
Plans: Work into affiliate marketing without being sleazy, finish book and market.

 

Coaching: 200/month
Pros: I enjoy it, location independent.
Cons: Can be emotionally exhausting.
Plans: Take on 2 more clients.

 

Negative Cash flow!
Renovation Debt:
550/month 4% interest, 3.5 years remaining, 20k balance.
Pros: Low interest.
Cons: Could hold back our financial freedom date.
Plans: Payoff with change in rental A.

 

Summary:
$1230 cash flow if traveling now and renting out our current residence.  We are close to half way there.  Potential goals/plans to get us there!
1. Refinance out negative 550 debt.
2. Buy another rental property.
3. Get better returns on Rental A through sale or finance.
4. Blog and Coaching increase.
5. Increase salaries to push us further faster!