In today’s episode of House Hackerz, we have a 3 for 1 special. We’re looking at a great house with three units—one primary residence and two Airbnb’s that bring in over $7500 a month in gross revenue. Investor Jordan gives us a tour of his home and explains how he’s building his house hack stack.
- 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 video.
Unit 1: Basement Suite
The first unit is the basement Airbnb. When you walk in, you’ll notice that the lights are on and music is playing. That’s because Jordan recognizes he’s in the hospitality business and wants his guests to feel welcome from the moment they step through the door.
When he and his wife bought the property, the basement was one giant room with a bedroom. They added a kitchenette and bathroom, plus installed laminate flooring and sturdy countertops. Now, the space is perfect for short term guests.
He purposefully leaves more than enough towels and toilet paper, plus stocks everything the guests need—shampoo, conditioner, soap, feminine hygiene products, and a steamer. Guests appreciate his attention to detail and generosity.
Unit 2: Garage ADU
Today, the Accessory Dwelling Unit (ADU) is a bright and modern space, but that wasn’t always the case. When they bought the house, it was an old garage that wasn’t in great shape. Jordan hired a general contractor who ran utilities from the main house out to the ADU, reinforced the framing and roof, and made it a livable space.
The process took about six to eight months and cost $65,000. Their average nightly rent for the ADU is $180, making the project worth every penny.
Don’t be afraid to hire a GC rather than try the DIY approach to construction projects. It’s easy to get in over your head and can take a lot longer than expected.
The ADU comes with its own private outdoor space that Jordan took the time to set up nicely. He’s found that most guests don’t actually use this space, but it looks great in pictures and helps people imagine what it would be like to stay there. A lot of his guests are vacationers coming to enjoy the outdoors in Colorado and like the idea of sitting around the fire at the end of the day.
Harnessing Technology to Save Time
Running two properties can be time consuming, but Jordan utilizes technology to make his job easier. There are three main pieces of software he uses to save time:
- Dynamic pricing: Rather than keeping up with price fluctuations himself, Jordan relies on dynamic pricing software to automatically track rates and adjust the Airbnb prices. This saves him a couple of hours every week, and ensures that his property is priced correctly to bring in the most revenue. It only costs $10-$15 a listing.
- Turnover and messaging software: This software allows cleaners to see when turnovers are going to happen, plus the name of the guest. Specific cleaners get assigned to each turnover, ensuring that no guest arrives at an unclean space. This same software also allows him to send automated messages to the guests so he doesn’t have to respond manually each time.
- Digital guide books: Instead of having a printed out house guide in his Airbnb units, Jordan displays a QR code the guests can scan to get the guide book directly on their phones. This saves him money and time when he needs to update the book, and allows him to include a lot more information.
Finding the Right Property to House Hack
How did Jordan find this great property? While it looks like a gem now, that wasn’t always the case. A lot of people overlooked this home because it wasn’t in the best shape. Jordan looked beyond that and saw its potential.
He was looking for a property with two to three units but realized he needed to be creative in a competitive market. So, he looked for properties that were zoned for two units and then checked to see how large the second units were, usually detached garages.
Jordan set a daily routine of searching properties and set up filtering mechanisms to save time. Remember, though, the data you’re seeing when you filter results is only as good as your parameters. Listing agents don’t always put in accurate data, so don’t over rely on filters.
Jordan’s House Hack Stack
Ever since Jordan and his wife started dating, he knew it was important for her to be a stay at home mom one day. Even though she’s a nurse now and loves her job, she wants to be able to stay home with their kids when the time comes. Knowing their timeline for starting a family, Jordan got to work figuring out how to supplement her income.
He looked into different investments like stocks or picking up a second job, but all of those options also took time away from his family. Then, he learned about real estate investing and saw the potential for it to change their lives. They moved out of their large, single family home into a duplex and started house hacking.
Since he started house hacking in 2018, Jordan’s purchased five properties and is under contract for his sixth as of the time of our recording. He moved quickly in order to build momentum. If you’ve never experienced momentum, I hope you get the chance to one day. Every time I’ve had momentum, be it in sports or my career, I’ve been able to get more done in those couple of years than I would in 20 years without it.
Start Building Your House Hack Stack
If this story resonates with you, reach out to Jordan to learn more:
- Website: http://jordanmalara.com/
- Email: Jordan@renjoy.com
- LinkedIn: https://www.linkedin.com/in/jordan-malara/
- Facebook: https://www.facebook.com/jordan.malara/
When you’re ready to start building your house hack stack, or need help figuring out a strategy, reach out to me for a free investment consultation.