Rental Property Investor · Pittsburgh, PA · Member since 2018 · 150 posts · 50 votes
I am looking to move to Eagle County, Colorado next year and I would like to house hack. Properties here are in the 600-1 mil price point. Has anyone house hacked consistently in an expensive market with low down payment options? I want to house hack 5-7 times over the next 5-7 years and I want to build a strategy to fit this in an expensive market. Are there any suggestions on how I would do this? I'm thinking of doing an FHA loan first. After this, what would be my options? Keep in mind that my wife will be W2 and I will be a 1099.
Income is certainly a consideration. If you're self employed, it doesn't necessarily mean you don't have income, but if your write off's offset your income to get you to a lower tax bracket that will impact the size house you can qualify for. Get with a loan originator that can do an analysis of your income before you try to buy anything. Get a pre-approval once they're done and then start the buying process. In those areas that have significant price points, the rents trend higher also, so you should be fine.
FHA is not supposed to be used for growing your investment portfolio and while one or two FHA loans would make sense to an underwriter, past that, you should certainly consider conventional financing (whether Jumbo or within conventional loan limits doesn't matter). You can house hack as many times as makes sense. Having said that, the move has to make sense; move closer to work, don't go from a single family to a 4 unit or a larger house to smaller because an underwriter won't believe you.
I second that. The move has to make sense. On the income side of the equation you have to be able to qualify for all the loans using income from W2, 1099 and your rental income. With this a key will be to not take on a lot of personal debt and to keep payments as low as possible for all other debts. Most rental properties are not cash flow positive on paper/tax returns when you count the mortgage interest, maintenance, and other deductions your allowed. You can add some back in like depreciation and one time expenses (with proof) but again the key is to not get over leveraged.