Buying a 2 condo package deal to ‘house hack’?

Question

Hello! BP newbie here. I am moving from to a new state in a couple months and have been considering purchasing a home to house hack as my first jump into real estate investing. Currently reading The Househacking Strategy to get started.

I found an interesting listing for a 2 condo package deal, $180k for two 1 bd/1 bth 600 sq ft units with both units currently renting at $1k a month. Both units are within the same condo complex.

What are some things that need to considered in analyzing a purchase like this for house hacking? Tax implications? Red flags?

How does the tenant’s lease work when you purchase an occupied property with intent to occupy and house hack?

I’d love to hear your insight and thought process.

Thanks!
Lynn

Thanks! Lynn

Michael Dumler · Answer

@Lynn Nguyen the tenant's lease transfers with the sale of the property, therefore, you just can't simply evict them after closing and use the condo to house hack. If you plan to finance using an owner occupied loan, the lender will require at least one of the units to be delivered vacant. Consequently, if you put in an offer, you'll have to include a stipulation addressing this by the time of closing. With current market conditions, this may be problematic for the seller given the assumption that they do not want to evict the current tenants. Moving forward, I would gather additional information from the listing agent and determine if one of the tenant's lease is soon to expire. As far as analyzing the deal, make sure to include HOA fees and that all HOA bylaws still permit rentals in the complex. Hope this makes sense and helps!