Househack BRRR. Is that a thing?? Is it possible?

Question

Hi. In order to fast track my real estate investing, if the numbers make sense, toying with a househack brrrr idea. I would love to get the opinon of other bay area folk who have considered this and/or doing it.

Heres my thought process--> 500K equity in current home--> sell home--> find a househack in either Oak, San Leandro or Alameda ( sticking to these areas because I want my kids to remain in the school they are in). Obtain home w traditional financing and put ~ 80-100K renovations. --> move in and obtain renters or airbnb--> refinance home --> take out equity for the next project

This is a househack BRRR

My criteria however are:

- safe area ( I have kids)

- Our unit must be at least 3 bedroom, 2 bath

Please be kind as you dissect my situation.

Account Closed · Answer

keep the house. Take out a $250K HELOC and buy a fixer upper large duplex in a good area. If you buy it right, you’ll live there (in half of the duplex) for free.

Now you have 3 units, are living for free, and are able to save hard (and fast) for the next one.

Chris Mason · Answer

Hi @Anita Ahuja,

Your profile says Oakland, is that where your home is?

One of the major fringe benefits in California is Prop 13. That house went up in value a half million dollars, but your property tax bill only went up about 2% per year. That's nothing.

How would the numbers look if you converted the home to a rental?

Frank Wong · Answer

Hello Anita,

The house hack idea of yours can work.  If your current home is at market value and you sell the home to get your equity out.  You can buy a home in the areas you mentioned that needs rehab work in which you can add value.  In order to make this work and worthwhile.

1. The new home will be below the price of your current and monthly payments much lower.  This way you will lower your current monthly bills.

2. The property has enough value to add to warrant your time and efforts to do a rehab.

Lee Ripma · Answer

@Anita Ahuja

Sounds possible. Have you identified any 2-4 units that would work? Are they possible to find in your target area? I agree with others that would be nice to have one that is fixed up and move-in ready but with a fixer component somewhere. You could also use a HELOC to buy the new place, get at least your unit move-in ready, then sell you old house and start on the value-add in other units.

Alexander Felice · Answer

Ive done this, no different than a regular BRRRR if you pay cash

if you finance the initial purchase it's MUCH harder because you have to find a house that is move in ready that allows financing, but also distressed enough that you can add a ton of equity. I've done this, but that was 4 years ago and I don't think I could find a similar deal (in my market)

Househack BRRR. Is that a thing?? Is it possible?

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