Can you house hack a 8 plex financing 4 personal and 4 commercial

Question

If a seller is selling the units of an 8 plex, but all are for sell....is there any reason why I could not house hack 4 of the units through a VA loan that I personally own, then buy the rest in my LLC with a commercial loan?

Joe Splitrock · Answer

@Corbett Brasington as others said, this comes down to how the property is deeded. If they are selling the eight units individually, that means they are deeded individually. This is common in my area with new construction. They build a twin home or fourplex or town house row and sell each unit separately. They do this to get highest sales price. They can sell units for over $250K each and buyers can use low down payment programs to buy them. Often the same building could be deeded and sold as a multiplex, but they will get less dollars per unit. Most of these developments don't even allow investors to buy individual units because it hurts sales price of other units in the development.

As @Bill Brandt said, if the 8 plex is two 4 plex buildings, it may be possible to do what you want. This would likely require the properties to be re-deeded and only the owner can do that. The seller is unlikely to do that. It may also not be possible to combine units on a single deed. Sometimes the development has shared driveways and HOA that link the entire property together.

Another option is buying all the properties individually and doing the re-deeding yourself. That would require cash and some commercial or short term lending. I am guessing that is not an option for you, otherwise you could just use a commercial loan to buy all eight and wouldn't need to house hack.

Bill B. · Answer

You understand why they usually aren’t deeded separately unless we’re talking about very expensive properties right? Who pays for the landscaping? Who chooses what is planted? What if someone wants to paint or re-side the house and someone else doesn’t, who pays for the water/power in the “common area”?  You’d need to have an HOA or a building association setup. I’m sure the local government is going to have their hand out if you try to separate each unit, etc etc etc.

Go to the county website and put in the address. If there isn’t a separate entry for each unit you are many dollars from being able to buy/sell each unit. In a building this small I bet it’s done less than 1% of the time. And if it is being done, then you can only house hack one unit and you need 8 loans. You are 100x time better as 2 fourplexes if it’s 2 buildings. If it’s one building your best option is if they are all sold as one unit and you don’t househack. You don’t use uo 8 of your 10 loans, 7 of which would all be investment properties with 25% down each.

Richard Neuharth · Answer

that would be dependent on how they are deeded. If 4 of the units are deeded together then yes you could buy those with your VA.

-side note- It wouldn't be beneficial most likely to use a commercial loan on 4 units. You could but the terms on 4 or less would be better for sure.

Bill B. · Answer

Not if the units are being sold separately. In the bank and the government’s eyes it’s the same if the seller was selling 8 houses and you bought all 8. You’d have 8 separate loans and you could only house hack 1.

I don’t know how you could swing it but the only way was if the seller was selling 2 x 4plex buildings. But it would have to be defined by just 2 property ids, not 8.

Richard Neuharth · Answer

House hacking only works up to a 4plex. Anything over that you lose the benefit of a residential loan. That's why it makes so much sense. Up to a 4Plex it qualifies just like a single family house. 5 units and up is a commercial loan and they don't have any of those same benefits.

Corbett Brasington · Answer

Thanks all!! Learned something here.  Looks like I should start looking into commercial loans.

Wayne Brooks · Answer

99% of the time....no.

Bud Gaffney · Answer

@Corbett Brasington no

Corbett Brasington · Answer

Right but a whatever plex can be sold by the units correct?  You dont have to sell the entire thing correct?

Can you house hack a 8 plex financing 4 personal and 4 commercial

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