Are there ways around the down payment for house hacking / brrrr?

Question

Hello everyone!

I am a college student trying to house-hack or do a brrrr property in Phoenix, but as a college student, I don't have a big enough down payment (Only about $2,000). Are there any ways around this??? Lenders keep giving me mixed answers on grants and down payment assistance. Also, does rental income only count if it is a 3-plex / 4-plex or can I count rental income if I plan to rent out rooms in a single-family home?

Jay Hinrichs · Answer

your way undercapitalized to be buying any kind of real estate. And the lenders know it..

you need to have down payment and reserve funds.. real estate is not a no money gig..

John Warren · Answer

@Dalton Riep while it is admirable that you want to get started, I would recommend waiting until you can get the funds together. House hacking is already a bit of a cheat code as it allows you to come to the table with way less than normal, and if you can't scrape together 3.5% down what will you do when the furnace goes out, a pipe bursts, etc.

Pick up an extra job, start a side hustle, and save, save, save.

Wes Blackwell · Answer

@Dalton Riep

The main issue you have here is income (lack of it due to college hours, still working on degree to get higher paying job, and not able to save up down payment, perhaps not enough work history, etc.)

So, how could you fix that? With a co-signer.

Perhaps one of your parents, uncles, cousins, etc. can go in on this deal with you. They provide the missing funds from down payment and use their income to help you qualify for the loan, and get a proportionate amount of the proceeds when you sell.

Barring that, just about the only option you have is seller-financing, but be sure you know what you're doing... and you'll still have the down payment issue as you'll have to find the right seller willing to work with you.

Have a client right now who would like to buy a home, but is self-employed and less than a year into his new business so he can't get a loan. His dad is going to co-sign with him so he can. Perhaps you can too.

Craig Jeppesen · Answer

Get that up to $20 k and you will become a successful investor in the long run.

Dalton Riep · Answer

Thank you everyone for the advise! I thought that might be the case. I will focus on continuing to learn for a few months. Should have about $5,000 saved by new years 👌

Theresa Harris · Answer

It is great that you have saved $2K.   As others said, you need more than that for a down payment even if you are going to rent out rooms.  Also what happens if something breaks and needs to get fixed, will you have money for that?  Keep saving and tell your family you'd rather get cash than gifts for your birthday and Christmas.

Bob Okenwa · Answer

@Dalton Riep

What kind of mixed answers are you getting in regards to DPA? There are many programs available in Phoenix that should be able to help you.

Not sure if an SFR you occupy and rent out individual rooms will count towards rental income or not. You should speak with a lender about this.

Are there ways around the down payment for house hacking / brrrr?

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