First Time Investor Looking into a House Hack in Los Angeles

[Adrian Agpaoa]

Hi everyone, 

Glad to be joining the BiggerPockets community! After a year of learning about real estate investing, my wife and I finally decided to dive into it.

I’m currently a homeowner in California and working toward our first deal. We purchased our primary residence in 2020, when interest rates were much more favorable, which has put us in a solid equity position today.

The goal for Deal #1 is a house hack that we can live in while building a strong foundation to scale into additional rental properties over time. From a capital standpoint, I’m evaluating the option of selling our current primary residence to fund the down payment and reserves for the house hack. We are currently working with a real estate agent to assess if selling is the right move, but I'm finding it very difficult to part ways with our current interest rate.  

I've looked into alternatives like a HELOC, but that option isn't available to me since it was already used for major repairs on the property. At this point, we're deciding whether redeploying equity via a sale makes more sense than holding it in my current home.

I’d love to connect with others who’ve been in a similar position — especially anyone who sold a primary residence to reposition into their first investment property, or who has experience house hacking in higher-cost markets like California.

Looking forward to learning from the group and contributing where I can.

-Adrian 

[Ewa Reza]

Welcome, Adrian. You’re asking the right questions, and this is a very common fork in the road I see as both a CA Realtor and investor.

A few thoughts from someone who has been on both sides of this decision:

1. The low rate you have is an asset, not just the house.
   Selling a 2020 rate is emotionally and financially hard for a reason. Once it’s gone, it’s gone. Before selling, I always run numbers assuming the current home becomes a future rental. Even if it is not a screaming cash flow deal today, a low fixed rate in CA often ages very well over time.
2. House hacking in high cost markets is more about loan terms than cash flow year one.
   In places like LA, SF, San Diego, the real win is buying 2 to 4 units with owner occupied financing. Low down payment, better rates, and you lock in long term appreciation while tenants subsidize your payment. Many first time investors underestimate how powerful that is over 5 - 10 years.
3. Selling to redeploy equity is not wrong, but it’s irreversible.
   I’ve seen people sell their primary, buy one house hack, then struggle to get back into the market later because prices moved faster than their savings. If selling is the only way to get started, it can work. But if you can keep the original property and still qualify, that usually wins long term.
4. Creative alternatives worth exploring before selling:
   – Cross collateralization or delayed HELOC after seasoning
   – 401k loan for part of the down payment
   – Buying a 2 to 4 unit that qualifies for 5% down owner occupied financing
   – Living very lean in the house hack for 1 - 2 years to rebuild reserves quickly
5. Start boring and scalable.
   Your first deal does not need to be perfect. It needs to be survivable. A small multi unit where rents offset most of the payment is often a cleaner foundation than selling a great primary to chase deal number one.

Side note since you mentioned house hacking... I currently have a 3 unit property in Los Angeles that qualifies for owner occupied financing with as little as 5% down. Deals like that are exactly how many investors here got started without giving up their original home. DM me if you're interested. 

So welcome to BP! You’re thinking about all this the right way, which already puts you ahead of most people.