House Hacking For Beginners

[Noah Brown]

If you could start all over what would be the first step you would take into mastering house hacking ? 

[Drew Sygit]

Quote from @Noah Brown:

If you could start all over what would be the first step you would take into mastering house hacking ? 

If I was starting out again with what I know now, I'd look to acquire a 2-4 unit property with an FHA 3.5% low-down payment mortgage.

I'd also look into using an FHA 203k renovation loan, allowing me to buy something ugly, thus unqualified for a standard mortgage, which would weed out a lot of competition and push the price lower.

To maximize my cashflow and gain landlording experience, I'd do STR and MTR in the other units, as well as the other bedrooms in my unit.

Since most cities won’t allow basement rental units, I’d consider finishing the basement, just well enough for me to live down there (cities don’t care if owner chooses to live in basement), so I could rent out ALL the units/rooms.

I'd save all my cash and look to refi the property in 1-2 years out of the FHA mortgage, so I could use it again if necessary. Depending on how close I was to having 20% equity in the property and being able to avoid PMI, I'd consider using some of my cash to pay down the mortgage when I refinanced. Otherwise, I'd save my cash for the next acquisition.

I’d also be posting on every social media platform and telling everyone I knew that I was looking for more real estate deals. I’d aim for low downpayment land contracts and lease options.

After refinancing out of the FHA mortgage, I'd evaluate if I wanted to repeat the 2-4 unit FHA 203(k) process again or if I had the 20% down to target 5+ units.

While still living in the property, AFTER the refi out of the FHA mortgage, I'd also explore securing a HELOC to tap my equity for emergencies.

Good luck with whatever you decide to do!