House hacking with a second property

4 Replies

Hi everyone, quick question wondering if anyone could lead me in the right direction and give me some useful advice! I have one property investment I’m currently live and flipping right now. I was looking to invest into my next property in the mean time to do a house hack for my current property, Is there any advice on how I should approach this next property and what loans I should apply for? 

Hi @Jamison Gallegos !  Can you elaborate on what you mean here?  Are you wanting to "house hack" the house that you are currently living in (right now)?  Is that a different property than the one you are flipping, or the same?  

If you are looking to move into a different home (as a house-hack, i.e. one that you will rent out a portion of to reduce your cost of living), then a good strategy would be to use an FHA loan to buy a 2-4 unit multifamily property in a different part of town than you currently live in. I suggest this because owning a home already, the underwriters will be curious why you are trying to buy a mutli-family property using an FHA loan unless there is a solid reason, like "I wanted to be across town to be closer to X"

Best of luck, Jamison!

Unsure if I fully understand what you're asking.  But.. to house hack your 2nd place.. live in your first property at least 2 years to avoid capital gains tax.  Then sell your 1st property, or buy your 2nd one and after renovations you could refinance into a personal home mortgage loan however in order to do this.. I'm 99% sure you need your original (1st home) under contract (for sale).  Hope this answers your question. 

You can otherwise purchase property #2 as an investment, live in it and then sell your 1st home a year or so later.  Just make sure to avoid capital gains tax you live in the home for 2 of the past 5 years.  Would also speak with a CPA about tax strategies. 

Originally posted by @Will Fraser :

Hi @Jamison Gallegos!  Can you elaborate on what you mean here?  Are you wanting to "house hack" the house that you are currently living in (right now)?  Is that a different property than the one you are flipping, or the same?  

If you are looking to move into a different home (as a house-hack, i.e. one that you will rent out a portion of to reduce your cost of living), then a good strategy would be to use an FHA loan to buy a 2-4 unit multifamily property in a different part of town than you currently live in. I suggest this because owning a home already, the underwriters will be curious why you are trying to buy a mutli-family property using an FHA loan unless there is a solid reason, like "I wanted to be across town to be closer to X"

Best of luck, Jamison!

 

Thank you so much this is super helpful into taking my next step! You understood what I was asking in my question perfectly. This will definitely be a plan that I take action on.