Goals, Business Plans & Entities

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how to buy a 2nd house hack

Posted Mar 13 2022, 19:52

Good evening everyone. I have done my first hosue hack in houston TX and I am wondering whats the best way to do another one? Like loans, partners, etc.

Houston, Texas

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Joseph A Gonzales
  • Lender
  • Denver, CO
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Joseph A Gonzales
  • Lender
  • Denver, CO
Replied Mar 13 2022, 21:11

Depends on how you want to fund the deal. If you are trying to get a regular loan it is almost impossible because Fannie Mae and Freddie Mac has put so many fees on investment and second homes. They no longer want investment and second home loans sold to them. Here is a few options: 1. If you want to stay in the house you got now. You can do a DSCR loan. Easiest investment loan out there. 2. Depending how long you have been in your current property you can buy another primary and move out of that property. Of course there are other ways to do it but it all depends on your situation and connections you have.

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Matthew Rolf
  • Real Estate Agent
  • Katy TX
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Matthew Rolf
  • Real Estate Agent
  • Katy TX
Replied Mar 14 2022, 09:53

Hey @Dalton N Green, I think the simplest financing way would be to move out, fill your spot with a tenant, and buy a next house hack as your primary residence.  Not sure if that's doable for your current situation or not.

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Ryan Thomson
  • Real Estate Agent
  • Colorado Springs
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Ryan Thomson
  • Real Estate Agent
  • Colorado Springs
Replied Mar 14 2022, 10:58

Hey @Dalton N Green! I actually grew up in Houston. I have house hacked in Colorado Springs and scaled to three in 2.5 years. I declare all of my rental income on my taxes and this allows me to essentially zero out my mortgage debt on my Debt to Income calculation. Then I use that rental income and my income from my job to qualify for the next house. Rinse and Repeat. 

Real Estate Agent Colorado (#100092341‌)

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Replied Mar 14 2022, 13:53
Quote from @Ryan Thomson:

Hey @Dalton N Green! I actually grew up in Houston. I have house hacked in Colorado Springs and scaled to three in 2.5 years. I declare all of my rental income on my taxes and this allows me to essentially zero out my mortgage debt on my Debt to Income calculation. Then I use that rental income and my income from my job to qualify for the next house. Rinse and Repeat. 


 What kind of loan do you recommend for low or no money down, I plan on moving into the next house hack and traxking all my income as well 

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Replied Mar 14 2022, 13:53
Quote from @Matthew Rolf:

Hey @Dalton N Green, I think the simplest financing way would be to move out, fill your spot with a tenant, and buy a next house hack as your primary residence.  Not sure if that's doable for your current situation or not.


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Replied Mar 14 2022, 13:54
Quote from @Matthew Rolf:

Hey @Dalton N Green, I think the simplest financing way would be to move out, fill your spot with a tenant, and buy a next house hack as your primary residence.  Not sure if that's doable for your current situation or not.


What loans would you recommend?

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Replied Mar 14 2022, 13:56
Quote from @Joseph A Gonzales:

Depends on how you want to fund the deal. If you are trying to get a regular loan it is almost impossible because Fannie Mae and Freddie Mac has put so many fees on investment and second homes. They no longer want investment and second home loans sold to them. Here is a few options: 1. If you want to stay in the house you got now. You can do a DSCR loan. Easiest investment loan out there. 2. Depending how long you have been in your current property you can buy another primary and move out of that property. Of course there are other ways to do it but it all depends on your situation and connections you have.


 I do plan on moving out and moving into another house hack, are there any loans that I can do with low down, I would like the next house hack to be a quadplex. And I feel it will take forever to save up enough for a down payment, any other ways around it or do I just have to tough it up

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Faruk Al-Hassan
  • Rental Property Investor
  • St. Louis
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Faruk Al-Hassan
  • Rental Property Investor
  • St. Louis
Replied Mar 15 2022, 00:35

In order to House hack again you need to move out and purchase a new place as your primary residence. By living there as your primary residence you get the most advantageous loans. If you want to house hack a multi-family most people look in to FHA loans for the low dp (3.5%) although there is additional some costs too. If your house hacking a single family house, ie. rent by the room; you can find a conventional primary home loan for 5% in many places. Good Luck!

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Joshua Janus
  • Realtor
  • Columbus OH & Cleveland, OH
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Joshua Janus
  • Realtor
  • Columbus OH & Cleveland, OH
Replied Mar 15 2022, 05:57

@Dalton N Green If you refi out of the current loan on your house hack, can you be <= 80 LTV? That would allow you to use your FHA loan again for a new property. My plan is to use a FHA 203k loan on an off market property to add value to a 2-4 unit and refi every year so I can continue to house hack new properties.

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Ryan Thomson
  • Real Estate Agent
  • Colorado Springs
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Ryan Thomson
  • Real Estate Agent
  • Colorado Springs
Replied May 16 2022, 10:38
Quote from @Dalton N Green:
Quote from @Ryan Thomson:

Hey @Dalton N Green! I actually grew up in Houston. I have house hacked in Colorado Springs and scaled to three in 2.5 years. I declare all of my rental income on my taxes and this allows me to essentially zero out my mortgage debt on my Debt to Income calculation. Then I use that rental income and my income from my job to qualify for the next house. Rinse and Repeat. 


 What kind of loan do you recommend for low or no money down, I plan on moving into the next house hack and traxking all my income as well 

 @Dalton N Green Conventional 5% down is great. If you are going to do a duplex or multifamily than FHA allows you to do 3.5-5% down. I would use FHA for a multifamily as you only get one of those at a time and you have to refinance to conventional to free it up.

Real Estate Agent Colorado (#100092341‌)

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Kyle Fry
  • College Station
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Kyle Fry
  • College Station
Replied May 18 2022, 07:38
Quote from @Ryan Thomson:
Quote from @Dalton N Green:
Quote from @Ryan Thomson:

Hey @Dalton N Green! I actually grew up in Houston. I have house hacked in Colorado Springs and scaled to three in 2.5 years. I declare all of my rental income on my taxes and this allows me to essentially zero out my mortgage debt on my Debt to Income calculation. Then I use that rental income and my income from my job to qualify for the next house. Rinse and Repeat. 


 What kind of loan do you recommend for low or no money down, I plan on moving into the next house hack and traxking all my income as well 

 @Dalton N Green Conventional 5% down is great. If you are going to do a duplex or multifamily than FHA allows you to do 3.5-5% down. I would use FHA for a multifamily as you only get one of those at a time and you have to refinance to conventional to free it up.


 Love this discussion, just wanted some clarification.
@Ryan Thomson
You're saying your system to scale to 3 house hacks was to purchase with FHA/5% Conventional, and then refinance into conventional 20% and repeat? How were you able to gain that amount of equity to refinance in that time frame? Buying value-add, appreciation etc.