House Hacking in expensive markets?

Question

Currently living in Honolulu. Problem is that it's expensive like California and New York. My mom actually applies for a VA loan so there's a lot of doors open up of what we can do and i was trying to get her in a multi unit. Hire a good property manager, and have the other units provide cash flow enough to pay the mortgage so my mom doesn't have to worry about that anymore. But is house hacking in markets like this even possible? I'm thinking with the BRRR strategy i can buy it at lower enough price where it would make sense to use the VA loan to roll the rehab with it. But is it possible? or am i chasing a pipe dream? What yall think?

Marina Draper · Answer

Hi Ian,

From what I see in Boston area - it is possible, but not in prime neighborhoods, more in run-down neighborhoods with properties that need extensive rehab. Many investors buy into them with the plans for appreciation, as gentrification is happening over there. It needs to be a 3+ unit building though, most duplexes don't even out.

It's tough to find good deals in these markets, so you should get creative about it. Good deals sell before they even get on MLS. Look for wholesale deals or off-market deals.

Good luck!

Ali Boone · Answer

Check this out. I just wrote about this question-

https://www.biggerpockets.com/renewsblog/considera...

Hope that helps! (mostly, run the numbers on it and see what they look like and go off of that)

Scott Wolf · Answer

@Ian Jackson I think in more expensive markets, you need to have a more realistic approach to what house hacking means.  By this I mean, if you can buy a multi-unit, and pay under market rent for your unit, then I would consider it a win.  If you are going to live there anyway, then it may make sense, plus you will hopefully enjoy the appreciation, and potentially be able to pull out some equity in the future with a refi or heloc.

Ali Boone · Answer

Thanks! :)

Brian Garlington · Answer

@Ian Jackson

It is definitely possible. I used my VA loan to buy a duplex in Oakland, CA............right across the bay from San Francisco.

1.  Does she need to be in the main tourist part of Waikiki or Honolulu....or is she open to being say 2-40 miles away from there....that will make it more affordable.

2. Since she will live at the duplex or triplex, she won't need a property manager because she will be able to manage herself.

Ian Jackson · Answer

@Ali Boone great read 👍🏾

Ian Jackson · Answer

@Marina Draper Thanks for the tip! i was thinking about contacting a we buy houses ad, and seeing if they have any deals as many of them tend to be wholesalers.

Ian Jackson · Answer

@Brian Garlington She definitely doesn't have to be anywhere near the big tourists areas and i can definately take on the duties of a property manager for her, but i think after awhile i would just hire someone else to do because i don't want to her worry too much about that stuff either. Do you cash flow off the property in Oakland?

House Hacking in expensive markets?

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