Hi Everyone,

I am looking to house hack in the Bay Area. Currently, I am focused in Oakland, but I'm having trouble making the numbers work (hoping to have the tenants pay off the majority of  the mortgage, insurance and taxes) and being in a desirable location. I am already working with an agent. I work in SF and would like to be as close to SF as possible. Any suggestions or ideas would be super helpful. Thanks in advance. 

Hey George,

House hacking is a fantastic tool anywhere in the country but it can be particularly difficult here in the Bay Area. It's important to remember that even if you can't cover the entirety of the mortgage through monthly rents, you are still saving a huge amount of money by virtue of having a reduced housing expense in one of the highest cost of living areas in the world. At the end of the day, the best way to know a good deal is to keep analyzing every property that matches your criteria. Within the context of househacking, that means boiling it down to exactly how much out of pocket you expect to pay each month for each property. There are plenty of tools on this site that will help you learn to accurately run those numbers. A great local agent who understands what you're trying to do will go a long way here. I hope that helps! Good luck and happy investing!

Hi Michael, this does help. I appreciate your feedback. That’s exactly what I have been doing. I’m targeting properties in good neighborhoods where the math makes sense for me. A very difficult task in the Bay Area. I’ve been focused on looking at properties that have potential for a value add like an in-law unit or other hacks that can help me increase equity as well as off set more of my mortgage. Thanks again! 

Hate to be the bearer of bad news, but...

Nothing in West Oakland that's a 3-4 unit is going to pass the FHA self-sufficiency test (if it's on the MLS & the seller isn't a personal friend giving you a stellar deal). And Home Possible for a 2-4 unit, for anyone that can actually qualify for the mortgage, is going away in less than 20 days.

So, we're looking at 15% down for a duplex, or 20% down for a 3-4 unit property. Is that viable for you? 

If not, it might be time to look at a larger SFR...

Hi Chris,

Thanks for the info. Honestly, I didn't even know about the FHA self-sufficiently test, so thanks for advising. I can do 15% on a duplex, but I am actually focused on a finding a single family home that has an in law or possibility of building one, so I can offset the expenses.

Thanks,

George