House Hacking Question

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House Hacking Question

Robert Ashline
Birmingham, AL · Member since 2018 · 13 posts · 5 votes

Hey guys, I am a 23 year old who is currently building my down payment fund for my first principle buy in Birmingham, AL. My plan is to find a small multi-family property and live in one unit while I rent the rest out, standard house hacking. I plan on using an FHA loan to finance my first buy, I'm open to using a 203(k) if the opportunity presents itself. However, I'm having trouble finding MFRs that meet my criteria as they are either extremely expensive or very run-down and located in war zones. Any advice on methods to refine my search? I'm using standard sites like Realtor.com and Zillow, I'm currently looking for an agent to work with as well. Additionally, my back up plan is to buy a three bedroom SFR and rent the rooms out if I can't find an MFR that meets my criteria, what is the general consensus of house hacking an SFR? Good idea? Bad idea?

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  • Mark Petitmermet
    Oregon City, OR · Member since 2018 · 22 posts · 11 votes
    7y

    Hey @Robert Ashline,

    Super stoked about your goals! The biggest drawback of house hacking a SFR is you have room mates. Cashflow can be pretty good though if you are okay with room mates. Obviously it depends on what you find and the specifics of it. If you end up with a SFR being near a University can be very good also since there is a demand for one bedroom places for students.

    For the war zone properties a recent podcast I listened to spoke about investing in neighborhoods like this where at least 25% of the residences had been or were currently being fixed up and updated. Basically if 25% of the neighborhood was starting to turn for the better then it was a good time to buy and get a good price where you can increase with the surrounding area. The episode was #274 with Paul Morris. 


    Getting a great realtor will really help you out also. I am newer to this and having access to a experienced realtor has given me so much more than I was getting on Realtor.com.

    So cool you're going for it!!!

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  • Robert Ashline
    OP
    Birmingham, AL · Member since 2018 · 13 posts · 5 votes
    7y

    @Mark Petitmermet Thank you for the feedback! I'll definitely have to check out the war zone podcast to see what my potential options could be, thank you for mentioning it. Birmingham is a big university town with the UAB Hospital/University attracting a lot of out of state students who are looking for residences around the city. That's why I feel that it would be very beneficial to own a property in that area whether it be an MFR or SFR. I'd definitely need to have a solid screening process for university students. I would be alright with roommates at my age if it meant netting positive cashflow so that I can compound my returns and buy another property within the next year or two. Thank you for the advice and I hope all goes well for you in this journey!

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