House Hacking in Sacromanto

7 Replies

Hello BP!

I am in the process of moving Sacramento, CA from San Jose, CA.  I was wondering if there is any advice/guidance out there for the area for fist time home buyer. I would be working from home so there no specific area constraint.  I'm also looking to possibly house hack my way in so I'm looking for areas and any methodology tips as well. 

Thanks,

Gautam

I'd suggest you look for multifamily (2-4 units) in Citrus Heights, Fair Oaks, Carmichael and Arden. If you can house hack a quadplex and cash flow on it, I'd say that's a great start. 

I've been in Sac for about 4 years so I do not know all the areas yet and some nice places are probably left out. But places I suggest to look for a primary residence would be Elk Grove, Downtown/Midtown, Land Park, Green Haven, West Sac,  Roseville, Folsom. There are more tech jobs in Folsom and Roseville if that's important. You'll find newer communities in Elk Grove and West Sac. All these are great neighborhood you can settle down with a family.  I suggest spending some time here and driving the neighborhoods to get a feel for it. 

If you're looking to house hack, I'm assuming your goal is to eventually turn it into a rental?  Then you'll be looking at less desirable neighborhood. 

This might be contrary to what a lot of people in BP believes. Why not buy your primary with a FHA loan first? Your mortgage will likely be cheaper here then what rent is in the bay. You'll be able to save up, network, and look for your investment property while you're local here and learn the market. Investment properties are in high demand here and there's lots of competition.

Good Luck.

@gyanendra welcome to the area! I made a similar move 2 years ago from Santa Clara to El Dorado Hills and we love it up here. There are many great areas to consider in the region, each with a distinct feel and price point. Most areas are much more affordable than San Jose.  What are you looking for? trendy areas close to restaurants and downtown life...high growth areas for investing...good schools...close to recreation??? What are your goals for a home and investment?

I house hacked my first property here in Sacramento a couple years ago. I was able to get a duplex in a prime location, but the market was totally different then. With every investor looking to buy multi-families right now, I would encourage you to find other market inefficiencies. Use groupthink to your advantage! The type of market efficiency that would work in your situation is finding a single-family home that can be fixed up over time. You could rent out the rooms for your entire mortgage payment while you save up for your next purchase.

@Gyanendra Gautam you did not mention how much of a loan that you qualify for so that is the best place to start. I would say get pre approved for a loan then you know what area that you can afford. All the areas that prior people have mentioned are good so the key is to know what you can afford. You can pm me for lenders if needed. If you do not like roommates then look into getting a duplex or 4plex because you can get much more in rents for a little higher in price.

@Gordon Cuffe I have a pre approved loan for $300,000 with 5% down payment.

@Pratik P. Great suggestion. I might reach out to you for further details. Thanks in advance!

@Embert Madison jr I agree with you. My current plan is to get a decent SFH live there for an year and then put it on rent. Key thing would be the numbers so the I can rent out the rooms for entire mortgage payment with positive cash flow.

@Gyanendra Gautam It will be very difficult to get positive cash flow with only 5% down payment unless a person can rent individual rooms for $700.0 per month. You will need to start researching how much homes rent for in many areas and compare that with the average price of those homes. You might also go to some rei meetings throughout Sacramento/Roseville to find an off market property to get a discount.