I want to do house hack in the DFW area, buying a multifamily and then living in one of the units, but so far I do not like the properties I've seen. I was thinking on changing my strategy to buying a single family, via FHA loan, living in it 1 year and then renting it, since I figured this market is big in single families. Now here is my problem, the MLS only shows the asking price in the properties and not what they rent for. What I'm doing now is taking the MLS street address and input Zillow to see how much the properties close by rents for. I make a range from the lowest to the highest it could rent for and then take the middle price. Is this accurate or do you think there is a better way of getting this info? Also, I am trying to train a virtual assistant, via upwork, on doing this task. Do you think this is wise, or should I do it by myself in this early stage.
Hey @Juan Rosado , I recommend using Hotpads.com for rental prices. Hotpads aggregates data from multiple rental sites.
As for how to price things out, it really depends on relative location to a property you're looking at, as well as condition and amenities. So if you have a 1Bed/1Bath single family home, you can't use an apartment complex with a pool and a gym as a direct comp. You can still use it as a comp, but you have to consider a certain amount of valuation for those amenities.
Hopefully this helps!
@Juan Rosado - For most cities, you don't see a lot of small multi family properties in pristine areas, they tend to be in B class or less areas. There are also a lot of exceptions like in New Orleans where it is very common to have a double, or duplexes that can run up to $1M.
My personal preference is to do multifamily. I have done three house hacks now, each one meet say 3 out of 5 of my personal criteria, if I went with a SFR I would get 4/5 or 5/5. To me it was worth the sacrifice to go with the house hack or multi that wasn't quite perfect for me personally but that made sense as a long term rental as it put me in a much better financial position. You can also use a FHA loan for a small multi.
Yes you can use can go the SFR route. But again here, I would buy something that will make a really great rental first, and put your personal preferences second. These might align a lot better in a SFR.
I also have used Rent-o-Meter to get rent ranges.
Thanks for you comments guys!
@Andrew Kerr have you ever used HotPads.com for rent ranges? Why do you prefer one over the other?
@Juan Rosado it’s less preferable, but if you’re young and single-ish a roommate house hack is also an option. I was looking for a place for myself and wasn’t using second bedroom/bath so I got a roommate. Covered almost half my monthly incl tax/Insurance. Screening is much more difficult. Had a few roommates until the girlfriend officially moved in.
@Juan Rosado - I just use rent-o-meter. They seem to pull good data. Then if I am curious on how far up the range I can go, I will use Trulia/Zillow and Craigslist to look at active listings in my price range. I am basically looking at them to see how it stacks up to mine - do I have better features & amenities for the same price range, etc..
@Juan Rosado Ran into a similar issue when looking for smaller MF units (less than 10 units) in the DFW area. We did not want to live in the ones we did find. Most of them are scattered in the C-/D neighborhoods. The wife would've left me if we did that... lol.
Hence, we started investing in bigger properties (100+ units).
To compare rents/features:
- Rentometer (my favorite)
- Hotpads (good but not always the best, IMO)
- Craigslist (surprisingly, decent for some areas of DFW)
It always pays to have a realtor buddy. They can do the legwork and find out the rental and other info.
But as @Nate Burgher mentioned, it's hard to come up with comps as there aren't many direct comparables.
It all boils down to understandings your goals, objectives, constraints and budget. If you're looking to invest (not in an owner-occupied) property then the dynamics are different than if you're looking to invest in owner-occupied properties.
PM me and I can connect you with some investor friendly realtors and share our tips.
Best of luck!
@Juan Rosado Two things: 1st, there are better loan products than FHA for house hacks, depending on your credit score and income you can qualify for either a 1%, 3%, or 5% conventional loan with close to the same interest rate. FHA loans carry PMI for the duration of the loan, Conventional loans drop their mortgage insurance when you can prove you have 20% equity, shouldn't take long if prices keep jumping 10% per year in DFW. 2nd, if you're going to use a realtor to purchase the property, they should be providing you with the "Leased" comps, all other routes of rental comps use what the property was listed at, not what it actually leased at.
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
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing