New Investor - House Hacking

11 Replies

Hi Everyone,

My wife, 2 month old son, and I just recently moved from NYC to LA. We're currently staying with family in Commerce to save money to buy a house somewhere in LA (open to suggestions). After stumbling upon the BP podcasts, we've decided to look for duplexes to implement a house hacking strategy by renting the second unit to a tenant. The exit strategy is to sell this home when my son is ready for college. The wife and I make +300K combined, we're currently not paying rent or child care (thanks, family!), and we have great credit. We're now ready to get started building wealth for our son.

Can anyone suggest a real estate agent in the LA area that has experience finding and closing multi-unit properties? It would be helpful if this agent is open to educating us on LA real estate. We're looking to get something locked-in in the next 3 - 6 months.

Thanks!

@Nigel McFarlane awesome to hear you and your wife are looking to do a house hack. I just finished and now living in my third house hack. It is a great strategy. 

Hopefully someone will chime in soon with an LA realtor.

@Andrew Kerr Hey Andrew, congrats on the third property. It's great to hear that the method works and can be used for multiple properties.

What's the thing you remember most about investing in the first property? Did you learn any lessons that you later applied to the other investments?

@Nigel McFarlane - well, the first investment/house hack I did I was only 20. That deal and my first few deals were really the learning experience. I made mistakes, spent too much money on work, among other things. But having the mind frame of considering that the time spent in the early deals was my "education" in real estate investing made it more bearable. 

The other big lesson learned was not to blow the savings. At 20 years old I was living pretty cheap from the house hack, and instead of saving the money I blew it like most 20 yr olds, lol. 

One other note having done dozens of deals, and three of which were house hacks, I had a 4 year period where I wasn't doing or living in a house hack and should have. It would have set me up even better.

@Andrew Kerr That is great advice! My wife and I are in our 30's so hopefully we're a little more financially intelligent than our 20 year old selves.

It seems as though that initial house hack was what set you on a successful path. I'm hoping it can do the same for us as well. 

If you don't mind answering, how did you fund your first deal at 20 y/o? FHA?

@Nigel McFarlane , at 20 I had been working as a loan officer for a year at that point, and it was 2002. I had a lot of connections with realtors, plus the market was growing strong in Raleigh-Durham area. It made it very easy. Its not like it is today where it takes a lot of hustle to find a really good deal. 

@Nigel McFarlane Hmm, @Chris Mason for financing and Evelyn Georgieva for REA services should be a great combo. Read about self sufficiency rule as well for MF for 2-4 units.

Hi @Nigel McFarlane .  I am an agent in the Los Angeles area and would be happy to help if you are still looking for an agent.  I am formerly of Chicago so I know how different it can be moving from a larger city to Los Angeles (it is definitely not the same!).  Happy to chat at any point!

Hi @Manolo D. Thanks for the recommendations. Also, thanks for the heads up on the Self Sufficiency rule. I've never heard of this before. 

@Nigel McFarlane My wife and I are currently looking to house hack our first 2-4 unit property in Long Beach. Certain parts of LA and the South Bay have rent control so be wary of that. Also, if going the FHA route, the rental units must cover the mortgage (tough to do in SoCal these days). I'd love to hear about your experience searching for suitable properties. Let me know if you want to connect.

Hey Nigel,

Congrats on the move to LA! I'm an agent and investor and I own and manage a mf property in LA. The other posters above have definitely posted some great content but feel free to reach out with any questions regarding my journey as an investor.

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