House hacking in palm beach county Florida

14 Replies

Hello BP community :)

I have been eager to start my real estate investing career for a few years now and am now looking to purchase my first home. I live in palm beach county Florida and I want to house hack in order to be able to save for a second property.

I am pre approved for 225k. I would love a duplex or triplex to start out with but in my area with that amount of money I have had no such luck finding any. So I was hoping to get a 3 bedroom property and rent out the other 2 rooms but I am only really seeing 2 bedrooms from what my realtor is sending me on the mls. So renting a room out would help me out but I am still going to end up paying a lot with the remainder of the mortgage and possibly HOA.

I am wondering if there is a better strategy I should take or if anyone knows a surrounding area that might be better for what I’m trying to do. I work from home so I could potentially move further I would just prefer to be close to my family.

Any input is much appreciated!

@Heather Wear hello! If you we were Pre-approved for higher than 225k, would that open up your options to other multi family properties in the area? Depending on the lender you’re working with, your preapproval amount can change drastically. Some lenders will not consider rental income from the additional units outside of the one you choose to occupy, some will! It all depends on who you speak to.

@Heather Wear

Have you ever considered a fha rehab 203k? This loan program allows you to buy a home with the intent to rehab and live in. This will allow you to buy a home that needs repairs and it's all backed by the govt, in addition, there are great minimal downpayment requirements. Furthermore, in your post you mentioned one of your expenses would be HOA fees. You could look at homes that do not have HOAs.


Hey @Heather Wear , welcome to the BP community!

Disclaimer: I am not at all familiar with your market or those surrounding it.

However, perhaps you could find yourself a SF with a mother-in-law suite/ADU? These are very common here in Atlanta, but not sure if the same rings true down there. If you don't love the idea of sharing a kitchen (or even bathroom) with people you don't really know, this is the way to go.

Plus, managing a rent-by-the-room once you move out is quite tough. So, if you do end up going that route, just make sure the home will still cash flow with one family in it.

Lastly, I'd recommend taking a look at Zillow/realtor.com yourself since that is pretty much a mirror image of the MLS. If you see some stuff on there that you like, send it to your REALTOR® and let them know that's what you're looking for. They should adjust accordingly.

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!

Originally posted by @Duriel Taylor :

@Heather Wear

Have you ever considered a fha rehab 203k? This loan program allows you to buy a home with the intent to rehab and live in. This will allow you to buy a home that needs repairs and it's all backed by the govt, in addition, there are great minimal downpayment requirements. Furthermore, in your post you mentioned one of your expenses would be HOA fees. You could look at homes that do not have HOAs.

As Duriel said, you can look for really distressed multifamily homes, that will be a bit cheaper, and not have to pay anything more than just the minimum 3.5% payment required by FHA. What's great about this program is the down payment requirement is 3.5% regardless of how many units (up to 4 units max for a residential home). If you're looking to house hack, this is a great way to do it with little out of pocket.

The only sticking point for the larger properties (3-4 units) is they're not nearly as plentiful as SFR's, so sometimes adding an off-market deal finding strategy like cold calling all 3-4 unit owners in the market's you're looking to buy in, is a way to help you keep moving forward if there isn't much inventory on the MLS.

Good luck!

Matt

 

Hey @Heather Wear ! So, the way I see it is if you are not going to make cash flow on the house hack once you move out then you should not do it.  That would be buying a liability not an asset.

Is it possible for you to move a little farther out and get a property that is a little cheaper? 

What if you bought a run down property, lived in it with a 203K loan, fixed it up and then moved out, took your profits and used that to put more down and do a second house hack?

Buy what you can afford and instead of doing a long term rental for your extra bedroom(s), consider doing short term rental like Airbnb or VRBO. This way, you won't be stuck with a potential nightmare tenant and you could make a ton more $$$ doing the short term rental for the spare bedroom(s). 

Consider doing an FHA loan with 3.5% down or Conventional Loan with 3% down. Only need to consider rehab loans like the FHA 203k or Homestyle if the property needs rehab or if you want to remodel it.

@Antonio Cucciniello I will definitely run the numbers and make sure it cash flows once I move out before deciding on a place.

I could look further north or south and see what else is out there. My area is crazy expensive.

Regarding the 203k loan I don’t have any experience in rehab but I guess the only way to learn is by doing. I will look into this option as well.

Thank you so much for your advice!!