Top Thoughts on House Hacking a 4plex in/around NOVA

[Joseph Kelly]

Greetings to BP,

I am planning on buying a four-plex in the next 6-9 months, living in one unit and renting the others out to start down the road towards financial independence. I haven't started actively hunting for deals yet, although I am communicating with my RE agent regarding multifamily properties in my county and the surrounding counties.

Location: Front Royal, VA, although I'm looking at the greater area as well; Financials: ~$11,000 available to invest; REI/tenant Experience = no hands-on experience, ongoing reading of BP books/forums/podcasts/blog posts, etc.

Top questions at the moment are:

1) What are the top considerations regarding house hacking, especially in an expensive market such as in/around NOVA, that a new investor such as myself probably won't have considered?

2) What constitutes a good buy-and-hold rental deal in an expensive market? If I'm buying for cashflow, does the upfront price of the property matter as much as it would (up to a point) if I were hunting for BRRRR deals or rehabs?

3) What are the top questions I should be asking as I begin to pursue my first deal?

Thanks in advance for any answers or insight that anyone has; I appreciate any and all information/comments/critiques. If I need to provide more details to solicit more exact answers, just let me know.

Joseph

[Andrew Spell]

@Joseph Kelly Zillow has 3 duplexes in Front Royal, no 3 or 4-plexes. With 11k and FHA loan at 3% down, you could buy a duplex in 70k range, leaving some for closing. Saw a duplex in Martinsburg for 60k in need of total rehab. Google has lots of job listings in Martinsburg. One IT company alone has 20+ openings listed there. You asked about things to think about. In no particular order:

• - PITI: What is your monthly carrying cost?
• - Can you carry the mortgage w vacancy/vacancies and cover a repair bill at the same time?
• - Do you have a reserve for repairs/replacement? Home inspection & home warranty can help lower reserve requirement
• - Utilities: will you cover and include in rent or are they tenant responsibility? A big factor is whether they are split (3 bills for 3 homes) or common (1 bill for all homes)
  
• - Security deposit: one month rent is common, due at lease signing
• - Is there a way to add value to some/both/all homes - add washer/dryer, dishwasher - to boost rent potential?
• - What are rent drivers in your area? In Arlington, the biggies are proximity to a metro station, parking, washer/dryer in home vs in building, and central A/C vs window units. A river view boosts rents too
• - Is there enough parking for everyone? What if there are 2 cars per home?
• - Is there any need for furnished homes for short-term rentals, AirBnB or longer.
• - Is there a need for semi-furnished homes? In Winchester, for example, SU students might pay more for a place w the main furniture pieces in place but bring their own linens, etc.

Hope there's something helpful here.