House hacking exit strategies

Charlotte, NC · Member since 2018 · 19 posts · 5 votes

I am a first time home buyer and was curious as to what exit strategies most house hackers use for their first house hack. Do I move out into another plex and and rent out both sides of the first property? Do I live there until the mortgage is paid? I know theres plenty of other ideas just haven’t come across them yet!

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William Aung

Virginia Beach, VA · Member since 2017 · 6 posts · 2 votes

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!

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Logan AllecBusiness Member
Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
8y
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.
Good luck.
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Grant Rothenburger
Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes
8y
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.
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William Aung
Virginia Beach, VA · Member since 2017 · 6 posts · 2 votes
8y
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!
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Joshua Allen
Member since 2020 · 1 post · 0 votes
5y
I'm curious about the details when it comes time to move out of the property that you are currently hacking.. Do you have to get one of the tenants to put the power bill in their name? What other considerations should we be aware of as well?
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