Where should I house hack?

[Nicole Heasley Beitenman]

Hi BP! I've been house hacking a SFH for 2-1/2 years now. I'm looking to house hack a MFH using a 203K loan to kick off my adventures into the BRRRR strategy. Long-term, I plan to hold the bulk of my portfolio in Youngstown. I work in Beachwood and live in University Heights.

I just got a new position with my company that will no longer require me to be at the office 5 days a week, so I'm considering locations outside of UH. I'm tired of being so far away from my family (Youngstown/Boardman) and boyfriend (Akron/Coventry). I'm also very sick of Cuyahoga County property taxes and the lack of accessibility on the east side. It takes a minimum of 15 minutes to get to ANY freeway from my house, and the traffic here sucks because there's a light at EVERY intersection. 

I love Kent, but supply appears limited. 

On the other hand, Cuyahoga County is littered with MFH. I do also enjoy the amenities around me such as downtown, Little Italy, Uni Circle, Cle Clinic, etc. And if the deal is worth it, I can deal with my current set-up for another year or so. I've talked to my boyfriend about our long-term plans, but we're still not sure if he'll move in with me or if we'll find a new place together after I finish my house hack and refi it. A lot of that will depend on where I buy.

I'd love your thoughts/feedback. Happy New Year!

[Daly Vaughn]

I did similar to what you are doing.  Started out with a large bank owned two family property that i used a 203k loan to fix up and lived in upstairs unit for four years in UH.  Even though i didn't really know what i was doing when i got started, the deal ended up being alright for me over the long haul, and allowed me to continue to learn and save up to buy more properties.  

Have definitely done way better deals since that time.  Just the increased cash flow from house hacking makes it very much worth it even if you don't knock it out of the park.  Also, I'd rather sacrifice a bit on cash flow and live somewhere you really like and feel comfortable.  

I work in beachwood as well and since that time, I have saved substantially on income taxes by having moved from UH to Beachwood. I also found a rare SFH with an in law suite with separate entrance which has allowed me to find some creative methods of continuing my house hacking ways. I'd recommend you look for something like that as a happy compromise if you can find it. Beachwood also has easy highway access.

PM for more details on different options with this approach.  Nothing outside of apartment communities zoned MF in beachwood, but there is still a way to rent out a "room" legally in beachwood, and you don't have to do a yearly rental inspection ($500 annually!).  Same for a lot of the other suburbs south of 271.  

Lastly, my 2 cents, most of what i have seen on MLS in places like hudson, solon, or chagrin falls that is zoned MF certainly didn't make a ton of sense on paper to me. But then again, with a house hack, any subsidy to your primary residence can give you increased cash to stash, tax advantages, etc. so that you can more quickly get to your next investment property than if you were just living in a retail SFH.

Best of luck to you! 

Daly

[Nicole Heasley Beitenman]

@Daly Vaughn Thanks for the thorough and informative response! I am a huge fan of house hacking, but I'd really like to live on my own. That's why I'd like to do a MFH, but an in-law suite with it's own entrance and amenities would be A-OK with me! Anything that has room to add value, gets me my own space while continuing to bring in that passive income, and is located in a safe neighborhood will work. I always discarded Beachwood as an option because I just assumed it would be too expensive, so I've never looked there.

Is there a way to search the MLS, Trulia, or Zillow for in-law suites?

[Daly Vaughn]

Thanks @Nicole Heasley Beitenman, I'm not aware of an easy way to search by in law suite.  Have always scanned more manually.  My family and I had been looking for something like what we found for quite some time, targeting areas like Beachwood, Orange, Moreland Hills, Chagrin Falls, Hudson, etc. due to school systems and quality of life considerations... I agree wouldn't usually qualify as good rental areas. Also, there is very limited inventory with this value add feature grandfathered in but you see them come up every once in a while.  We won't be covering all of our own living expenses.  Never really thought we could with this strategy.  But we will be heavily subsidizing, while getting more privacy and comfort than our prior 2 family up/down home.  If you pursue it, just be careful to read up on the building department's rules to ensure you can figure out what you are and aren't allowed to do.  Maybe if I didn't have fam though, i might consider something more in line with what you're looking for (2-4 units; opp to cashflow positive or break even from tenant units).