Owner Occupied Rentals prevailing wisdom?

[Dan Sanders]

Hello,

Anyone here own and live in a duplex/triplex/quadruplex?

Looking for the prevailing wisdom on doing something like this and how much it skews the 50% rule kinds of guidelines. Any blog posts, podcasts, etc? Just listened to BP #99 and they touch on it briefly, but didn't know if anyone had a specific focus in this area. 

Thanks!

[Zach Davis]

Hi again @Dan Sanders! So far, I have lived in my properties which came in handy when I sold my first rental house and had to pay no capital gains tax. I lived in my duplex for a short time and obviously my personal home. I think @Brandon Turner refers to it as house hacking. Its a good way to get a lower interest rate/down payment loan and also save money on living expenses. I'm actually selling my personal home so that I can get into another multifamily and achieve just that. Legally, you have to live on the property for 1 year to qualify for an owner occupied loan. Otherwise I believe its technically fraud, although I know a few who have never actually lived in the building and gotten away with it (not suggesting that).

I don't know what everyone else does as far as running the numbers, but I simply run them as if I would be renting the whole property since I would only be living there for a short time. If it works out as an investment, then I'll just accept whatever cash flow or reduced living expenses I get while I live there. The important part for me is that its still a cash flowing investment when I move on to the next one.