Specialist · Tyler, TX · Member since 2017 · 14 posts · 5 votes
After I’m done with school in August, I’m thinking about buying a single family living in it for a year or two and renting out the other rooms.
After doing this, I’d like to move out of the single family and keep it as a rental, then repeat with a small multi family (2-4units).
Here’s my question: does house-hacking a single family as described above give me landlord experience in the eyes of a lender?
I believe that if I kept the single family while trying to buy a multi that I would need that income from the single to lower my DTI to qualify for a multi family home loan.
But if house hacking that single family doesn’t “count” as rental experience in the eyes of a lender then I might as well save a little longer and just start with a multi family right?
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y
Unless you are planning on buying this SFR cash you will have the perfect opportunity to ask the lender this question when you go to get pre-approved. It may very well depend on the lender as to whether it counts as experience or if experience is even necessary.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y
Unless you are planning on buying this SFR cash you will have the perfect opportunity to ask the lender this question when you go to get pre-approved. It may very well depend on the lender as to whether it counts as experience or if experience is even necessary.
Rental Property Investor · York Haven, PA · Member since 2018 · 49 posts · 39 votes
7y
Set some tenant screening standards and follow them. You can get lots of good ideas here on BP.
Have a signed lease agreement.
Set up payments to go to a bank account that you set up separately for your room rentals. I'm not sure the best way to do this as our property manager handles that. For our duplex that we self manage we use a company called Cozy. cozy.co
Treat it like a business and have documentation/proof that you did so and that could be helpful.
Asking the lender for the SFH like @Aaron K. suggested is a great idea!
New Haven, CT · Member since 2013 · 222 posts · 134 votes
7y
I agree with @Aaron K. Ask the lender that's loaning you the money on the SFR. But also keep in mind that this may differ lender-by-lender. Also, it could be a "No" for the lender now, but a "Yes" for in 2 years (or vice versa).
Just curious as to why you wouldn't want to purchase the small multi-family first though?? I think that would be the better option.