House hacking in Nashville
Hi
New to the pro membership, looking to possibly house hack in Nashville,TN (or close to it). Not sure where to start as far as finding the right lender and also what needs to be provided. Also in the process of leaving my main residence (fully owned, in Bloomington,IN) and would like to rent it out. Also open to the possibility of getting into bigger multi family (with or without a partner).
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Welcome @Rami Halperin - working with a lender upfront is a good idea to determine how large of a mortgage you can qualify for in terms of financing and what the monthly and upfront cost of the mortgage will look like. If we're talking conventional or government (FHA) loan, the lender will need to pull your credit and analyze your monthly income, monthly debt obligations and the funds you have to cover the upfront costs of the loan.
If you already own another home, then any monthly expenses associated with it (mortgage, taxes, insurance, HOA) will be counted against your Debt-to-Income ratio, restricting how much additional debt you can take on in a new mortgage. If you have a signed lease agreement for someone renting that property, then you can reduce that property's effect on your DTI.
@Rami Halperin I would work with a real estate agent that is currently house hacking or has house hacked in the past. The common example of house hacking is purchasing a 2-4 unit property, living in one unit and renting out the others. While this is an awesome strategy, in today's competitive seller's market, it's easier said then done. Similar to that of any other real estate investment, you need to get creative in your strategy in order to utilize the property to it's highest and best use. Working with a resourceful agent will also help with assembing the rest of your team (lender, contractor, etc). As far as renting out your current residence, I would network with several different property management companies to determine what is a right fit for you and the investment. Hope this helps!
Thank you Michael, that's very helpful! Would you recommend against getting a renter to my main residence without management? The long distance maybe be challenging but maybe with a quality renter. Also I'm curious to learn which websites/strategies are often used to find renters?
Also on a separate subject, I see that you are from Atlanta, I was just looking today on some listings over there, is there a possibility to get a reasonable condo/townhouse for around 50K (if one pays in cash?) I have seen some listings but not very familiar with the area.
@Rami Halperin depends on how comfortable you would be managing the property from a distance and how much the management fee would eat up your cash flow. More likely then not, I would recommend for most out of state investors to have at the very least some sort of handyman/boots on the ground to overlook the property. To reference current market conditions again, rental demand is at an all high, finding a suitable renter should be of no trouble if the property is leased appropriately based on market rents. As for selecting a suitable tenant, this brings up the imprortance of screening properly. 50k cash purchase for a condo/townhome in ATL or the surounding submarkets? Unfortunately, no way. I would advise using the capital as a downpayment and leverage OPM on a solid deal.
Hi Rami, I've recommended my clients to Matt Harris at 1796 Mortgage. I'm sure he'd love to talk to you about it.
When I moved to Nashville, I was surprised how many people house-hacked. It's very common for people to finish out their walkout basement here and quite easy to keep rented. My sister and her husband currently doing just that.
Welcome to the forums. I can recommend a local lender if you would like. The lender will tell you exactly what they need in order to qualify you for the loan. Every lender is going to be different, and it also depends on what type of property you are purchasing.
I would recommend that you narrow down your search to something more specific. Exact areas you want to target, as well as what exactly you are looking for.
House hacking is the easiest way to get into the market (in my opinion). I would also say you shouldn't limit yourself to house hacking multi fam if you prefer to live in a single fam home. You can always rent by the room as well.
Hi, Thanks, I would love to learn more, please feel free to message me.