House Hacking w/ VA Home Loan

[Markus Stringer]

Hi BP Community! My wife and I are seeking to "house hack" a multi-family property here in South Florida using a VA (no money down) loan. It will also be our first investment property. For some reason, none of the numbers seem to make sense. I run the numbers using the BP calculator for when we would not live in the property. When I do, the COC ROI seems to always be negative but the Annualized Return seems to be great. Do I need to put money down on a "house hack" for it to be successful? What am I not understanding? Any advice is greatly appreciated!

[John Warren]

@Markus Stringer this is such a common issue for house hackers. Putting down nothing makes it very, very hard to find good cash flow. You often times need to know how you can "create" the cash flow by pushing rents, remodeling, contesting taxes, shifting utilities to the tenants, etc. A great agent can help you a lot as your local sub market will definitely be different and the BP calculator is just a starting point. For instance, will tenants pay water or will the land lord? What about heat? In your area, AC? These are local numbers and you need a local agent who knows what they are doing.