Good Areas in DMV for House Hacking a Multifamily Unit

[William Rowan]

Hi Everyone,

I am new to real estate investing and am looking to house hack in the DMV area. I got qualified for about $650,000 so I am trying to evaluate all my options. Ideally I would try to get a 3/4 unit property somewhere in DC proper, PG County or Montgomery County (Takoma Park/Silver Spring), live in one unit and rent out the others. 

To my seasoned investors, what makes the most sense in the area/market? I also know TOPA is a thing here in the DMV area and I'm not sure if that should alter any real estate investing decisions I should make.

Also, since I would be house hacking, I would want to live in a relatively decent area. I would appreciate any insight, advice or tips anyone may have. Thanks!

[Russell Brazil]

Quote from @William Rowan:

Quote from @Russell Brazil:

Quote from @William Rowan:

Hi Everyone,

I am new to real estate investing and am looking to house hack in the DMV area. I got qualified for about $650,000 so I am trying to evaluate all my options. Ideally I would try to get a 3/4 unit property somewhere in DC proper, PG County or Montgomery County (Takoma Park/Silver Spring), live in one unit and rent out the others. 

To my seasoned investors, what makes the most sense in the area/market? I also know TOPA is a thing here in the DMV area and I'm not sure if that should alter any real estate investing decisions I should make.

Also, since I would be house hacking, I would want to live in a relatively decent area. I would appreciate any insight, advice or tips anyone may have. Thanks!

 Is $650k what you've been approved for for a single unit property? Or for a mult? $650k won't go very far for a multifamily.

Most multis in MoCo are in Takoma Park which has extremely restrictive rent control. Silver Spring has virtually none. DC is where the most multis exist in the metro area. $650k ypu could be in Deanwood, Anacortes, and those swaths of SE and NE DC. A 4 unit will be out at that price. (Unless that's your single unit price and then qualifying rents can push your Purchase Price up).

On the other side of the river you'll generally be looking at $900k and up for a 2 unit. A lot more on 3-4 units.

 Hi Russell,

Thank you for your insightful response. I qualified for a multifamily at $650K. Do you think the restrictive rent control is worth looking to buy in Takoma park if I can find something there? Is the TOPA there something that should deter me outright from the area? 

Would I be better trying to purchase a townhome somewhere in the DMV with a basement that I could potentially rent out? From your experience, what do you think is the most feasible/makes the most sense in this DMV market when it comes to house hacking.

 I find TPs rent control too restrictive personally. It's not unusual to have tenants paying $800 pm what would be a $2000 plus market rate unit.

TOPA in any of the jurisdictions that have it doesn't really concern me. But I'm also an expert at navigating TOPA. Not a lot of people out there that have a lot of experience with it.

Other than a small Duplex here and there in say Trinidad, maybe Brookland occasionally, youll mostly be limited to East of the River (EOTR) at your price point. All strongly appeciating neighborhoods, but can be a rough tenant base.

A rent by the room situation (renting our basement if it is legal living space) could be a good solution in Brightwood or Riggs Park...or even Silver Spring. I have a lot if clients too who will live in the basement (both in single family and multifamily) and rent out the upstairs. You'll just want to make sure the living space is legal and you stay under the occupancy limits. In MD that's generally 5 unrelated people and DC 6 people.