I moved out into what is now my primary residence and continue to rent all units.
In terms of long-term exit strategy, my plan is to eventually 1031 up into a larger property.
I think most of the time they move out and continue renting it and build their portfolio. I'm sure a lot of people use the BRRRR strategy in combination with house hacking. Ultimately it's up to you and your goals.
I haven't yet purchased an investment property yet, but would love to attempt to chime in!
This is how I would approach the situation:
Typically people who house-hack are utilizing an FHA loan which would require the investor to occupy the home for a year. During this time I would be preparing to refinance into a conventional loan in order to get rid of PMI and mainly to have access to utilize another FHA loan. You can only have 1 active FHA loan at a time, so refinancing would allow me to have it as an option again to use for different property to house hack into.
This would allow me to produce a positive cash flow from the first home due to someone else replacing my position in the home and would help me progress further into quickly acquiring another property with the advantage of the FHA loan(Low downpayment).
After refinancing the second property after occupying it for another year, I would personally look to find another property I could house hack into with another FHA loan, but this time around, I would hopefully have enough cash saved up to be able to purchase another property in this same year through a conventional loan(20-30% downpayment) and have it completely rented out, So during the 3rd year you would at minimum - 4 properties, 3 of which are completely rented out and 1 where you are house-hacking!
There's just such a variety options that you can go from here that there's never a set plan of what you may do once you get started due to whatever deal you may encounter at the time and how you would go about acquiring the property, whether it be conventional, hard-money, private investor, partnerships, 203k etc.
Hope I didn't butcher anything too hard, I'm still learning everything also!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.