Starting the Process of House Hacking

Seattle, Washington
Starting Out
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Starting the Process of House Hacking

Samuel Austin Jarvis
Member since 2023 · 14 posts · 6 votes

Hello,

My brother and I are looking to get into real estate investing in the Seattle area. We are 21 and 23 years old.

Our plan is to house hack our first property and our timeframe is to own our first property roughly 18 months from now (at the latest). We have talked to a mortgage lender and a big problem we are running into is our lack of history when it comes to income as I just graduated from college in June and my brother is still a senior. Our idea is to house hack our first home via a FHA 203K loan (or just a FHA loan) but understand that banks want a minimum of 2 years of steady income before they are willing to lend. We are looking for some direction and advice in terms of how to get creative with lenders and house hack our first property. We also want to open this conversation because we would love to start connecting with people in the real estate investing world to learn from them and ask questions. We are more than happy to speak over the phone or via zoom.

Another thing to note is I live in NYC but my brother plans to live in Seattle upon graduation. I know that can create some complications when it comes to house hacking and we are all ears to how we can get creative with the process (my brother who lives Seattle plans to live in the house hacked property).

Thank you everyone.

Best,

Samuel

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Michael HaasBusiness Member
Real Estate Agent · Sammamish, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 725 posts · 3k+ votes
2y

I’ll DM you a link and my info so we can connect @Samuel Austin Jarvis!

[email protected]408-439-7873
HouseHack Seattle | Michael Haas & Team572 Reviews
WebsiteView Page
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  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    2y

    @Samuel Austin Jarvis- thanks 1) having income / employment will be crucial if you want to put min down so if your plan is to buy in 2024/ 2025 - work on getting jobs in place 2) for a owner occupied house hack - if needing both incomes for qualifying - you both will need to occupy 3) FHA allows a down payment as low a 3.5% of the purchase price - as of this week there are now conventinal loans that can be used that will allow a 5% down payment ( conventional loans are often better to use than FHA because * ther will be no need for upfront mtg insurance fee of 1.75% and * the monthly mortgage insurance wont be permanent

    3Reply
  • Samuel Austin Jarvis
    OP
    Member since 2023 · 14 posts · 6 votes
    2y
    Quote from @Dave Skow:

    @Samuel Austin Jarvis- thanks 1) having income / employment will be crucial if you want to put min down so if your plan is to buy in 2024/ 2025 - work on getting jobs in place 2) for a owner occupied house hack - if needing both incomes for qualifying - you both will need to occupy 3) FHA allows a down payment as low a 3.5% of the purchase price - as of this week there are now conventinal loans that can be used that will allow a 5% down payment ( conventional loans are often better to use than FHA because * ther will be no need for upfront mtg insurance fee of 1.75% and * the monthly mortgage insurance wont be permanent

     Hello Dave,

    I appreciate the reply. Can you speak more about this new 5% down conventional loan?

    And I understand that we both would have to live in the property if we were to both sign on, but I am curious if a co-signer has to live in the property or if I could gift my money to my brother?


    As for income, would it be necessary to have a history of 2 years?


    Thanks,

    Samuel

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    2y

    Samuel - thanks ....I  believe non occupant co borrowers  will be allowed .....and I believe  that gift funds from relatives  will also be allowed ... I think that employment for  12 months is required ...this  5% down  Conv  program is usable for  1-4 family  properties  and  literally  the  first  day for these guidelines / program is this coming Monday ....I will check  these questions ...Email me  for  me detials and  I will hopefully  have the  answers  shortly 

    0Reply
  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    2y

    @Samuel Austin Jarvis Employment in the same line of work is usually the requirement so if your brother knows what job field he wants to be in upon graduation he could potentially get a job now in that area while he’s still in school even if it’s only 30-32 hours a week and get income showing up towards his 1 year requirement.

    You should start in one line of work immediately and refrain from job hopping until you secure your first mortgage.

    If either of you will be working in a tip related industry such as waiting tables or bartending be sure to report 100% of your cash tips. As much as you won’t want to, the amount of money you can qualify for on your mortgage is based on total income and if you claim $50,000 in tips and wages but didn’t report another $30,000 in tips you’re just shooting yourselves in the foot by decreasing the amount of house you can buy.

    0Reply
  • Dru Hill
    Real Estate Agent · Member since 2020 · 17 posts · 6 votes
    2y

    There are some creative ways to do financing. How much do you anticipate having as a down payment?

    0Reply
  • Adrian Chu
    Real Estate Broker · Seattle, WA · Member since 2014 · 1k+ posts · 427 votes
    2y

    Time in school counts towards your 2 year employment history for most types of loans. 

    1Reply
  • Samuel Austin Jarvis
    OP
    Member since 2023 · 14 posts · 6 votes
    2y
    Quote from @Alecia Loveless:

    @Samuel Austin Jarvis Employment in the same line of work is usually the requirement so if your brother knows what job field he wants to be in upon graduation he could potentially get a job now in that area while he’s still in school even if it’s only 30-32 hours a week and get income showing up towards his 1 year requirement.

    You should start in one line of work immediately and refrain from job hopping until you secure your first mortgage.

    If either of you will be working in a tip related industry such as waiting tables or bartending be sure to report 100% of your cash tips. As much as you won’t want to, the amount of money you can qualify for on your mortgage is based on total income and if you claim $50,000 in tips and wages but didn’t report another $30,000 in tips you’re just shooting yourselves in the foot by decreasing the amount of house you can buy.


     Thank you Alecia.

    0Reply
  • Samuel Austin Jarvis
    OP
    Member since 2023 · 14 posts · 6 votes
    2y
    Quote from @Dru Hill:

    There are some creative ways to do financing. How much do you anticipate having as a down payment?


     Roughly $50,000.

    0Reply
  • Samuel Austin Jarvis
    OP
    Member since 2023 · 14 posts · 6 votes
    2y
    Quote from @Adrian Chu:

    Time in school counts towards your 2 year employment history for most types of loans. 


     Thank you Adrian.

    0Reply
  • Dru Hill
    Real Estate Agent · Member since 2020 · 17 posts · 6 votes
    2y
    Quote from @Samuel Austin Jarvis:
    Quote from @Dru Hill:

    There are some creative ways to do financing. How much do you anticipate having as a down payment?


     Roughly $50,000.


    Oh, can possibly do somethings with that.  

    0Reply
  • Samuel Austin Jarvis
    OP
    Member since 2023 · 14 posts · 6 votes
    2y
    Quote from @Dru Hill:
    Quote from @Samuel Austin Jarvis:
    Quote from @Dru Hill:

    There are some creative ways to do financing. How much do you anticipate having as a down payment?


     Roughly $50,000.


    Oh, can possibly do somethings with that.  


     Can you expand on that.

    0Reply
  • Dru Hill
    Real Estate Agent · Member since 2020 · 17 posts · 6 votes
    2y
    Quote from @Samuel Austin Jarvis:
    Quote from @Dru Hill:
    Quote from @Samuel Austin Jarvis:
    Quote from @Dru Hill:

    There are some creative ways to do financing. How much do you anticipate having as a down payment?


     Roughly $50,000.


    Oh, can possibly do somethings with that.  


     Can you expand on that.

    Depending on what you want to buy, there are some funding programs that would allow you to buy, even with your limited job history. 
    0Reply
  • Samuel Austin Jarvis
    OP
    Member since 2023 · 14 posts · 6 votes
    2y
    Quote from @Dru Hill:
    Quote from @Samuel Austin Jarvis:
    Quote from @Dru Hill:
    Quote from @Samuel Austin Jarvis:
    Quote from @Dru Hill:

    There are some creative ways to do financing. How much do you anticipate having as a down payment?


     Roughly $50,000.


    Oh, can possibly do somethings with that.  


     Can you expand on that.

    Depending on what you want to buy, there are some funding programs that would allow you to buy, even with your limited job history. 

     What kind of programs? Can you be more specific. Happy to take this privately too to discuss more.

    0Reply
  • Samuel Austin Jarvis
    OP
    Member since 2023 · 14 posts · 6 votes
    2y
    Quote from @Michael Haas:

    @Samuel Austin Jarvis way to get started early - my wife @Jess Haas & I HouseHacked our first property at 21, and starting HouseHacking early had a lot to do with how successful we've been in Real Estate Investing.

    We shot a Youtube video on the new 5% down conventional program - just look for @HouseHackSeattle on YouTube to find it. As others have mentioned, the main disadvantage of FHA is that FHA loans at 90% loan-to-value or less (more than 10% down), have the monthly mortgage insurance premium payable for at least 11 years, and new loans at more than 90% loan-to-value (less than 10% down), have the monthly mortgage insurance will be payable for the life of the loan. Not so with conventional - the monthly PMI can be removed once you have sufficient equity.

    Would love to meet you / your brother and talk more - we both host and attend many local investor meetups, just look for HouseHack Seattle on Meetup dot com, or Hello Eric Yu on Meetup dot com to find what events are coming up for local investors to network and learn!


     Hello Michael,

    My brother and I would definitely be interested in meeting up with you or hopping on a call. Happy to take this private to talk more...

    I looked at your youtube channel and could not find the video you are referring to with the new 5% down conventional loan. Do you have a link to it?

    Best,

    Samuel

    1Reply
  • Michael HaasBusiness Member
    Real Estate Agent · Sammamish, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 725 posts · 3k+ votes
    2y

    I’ll DM you a link and my info so we can connect @Samuel Austin Jarvis!

    [email protected]408-439-7873
    HouseHack Seattle | Michael Haas & Team572 Reviews
    WebsiteView Page
    5Reply
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