House Hacking in the Houston TX Area

15 Replies | Houston, Texas

Hi Bigger Pockets,


I am a brand new, want to be real estate investor, looking to score my first deal in the Houston, TX area by the end of Summer 2019. Specifically I am interested in investing in a $200k or less duplex that is no more than a 30-40 minute drive from Deer Park, TX, preferably in the Clear Lake/Webster area. 

I am currently a fifth year (5/5) Mechanical Engineering student at Drexel University in Philadelphia, PA, I have recently accepted a full time job offer as a Mechanical Engineer at a chemical company located in Deer Park, TX with a start date in July 2019. 

I have been working in Houston the past six months getting familiar with the area, doing plenty of research and diligently doing my homework on real estate investing and feel confident about closing on my first deal sometime between now and August 2019. I was wondering if anyone has any good tips on investing in the Houston area for the first time, any recommendations for a good realtor, tips on investing remotely, and even info/tips or past experiences on obtaining a loan with just an offer letter. Just anything that you wish you knew before making your first investment would be a great help!

I appreciate your time and thank you in advance!

-Frank

Hey Frank,

I have a great realtor that I can introduce you to! They specialize in house-hacking in the Houston area. I'll message you the contact information. 

Thanks,

Brooke

Frank,

I am a mechanical engineer myself and moved to Houston to work in oil and gas! I strongly recommend you live in the Houston area (rice village, midtown, the heights or washington ave.), especially if you don't know many people - the social scene makes it worth the commute. My wife convinced me to live in an overpriced apartment in the Rice Military/Washington Ave. area our first year there, and then we bought a house in the Rice Village area the following year. We are close to 59, which actually makes the commute to Deer Park (or Baytown where I was) very easy. 

If you have any questions or need any advice on moving to Houston or investing there please let me know! I spent a lot of time looking for what your looking for and eventually had to change my strategy because I couldn't find any livable multi-family properties at my desired price point. Instead, we purchased a townhome in the rice village/west university area and decided to "House Hack" part time by renting it out as a vacation rental.

We are actually in the process of moving back to the Nashville now, so we've listed the house for sale (just posted details in marketplace if you want to read more about our experience). It sounds like it is above the price point you are targeting, but it may give you some ideas based on the house-hacking method we used as an alternative to buying a multi-family! 

Let me know what questions you have or if you'd like to discuss further.

-Tyler

Welcome to Texas Frank,

The only advice I would give you is do your research and make sure you aren’t buying in a flood plain. There has been so much development  in the past that it has really messed up the drainage in the Houston area, it doesn’t take a lot of rain to get the loacal bayous and water ways to break over their bank. With that being said also be weary about buying water damaged houses from Harvey. Best of luck to ya!

Hi Frank,

I agree with Tyler. If youre not from here and you don't have a wife and two kids already, I'd suggest not living in the suburbs. East of Downtown (some people unfortunately call it "Eado") is close the Deer Park area. "Eado" is desirable for people in their 20s and 30s ... lots of multifamily props available as well.

Mark

Hi Frank. I know this thread is a bit old but I assume you're still looking. Reinforcing what others have said, you will have a substantially more fun time in Houston if you live in/near the West side of the 610 loop. Unfortunately it may be very difficult to find a duplex in this area at your $200k price point - I certainly didn't see anything I would consider livable in the area I've described at that price but then again there's LOTS of properties here. 


I am also a ME and house hack a duplex in the area. The way I made the numbers work is something you might consider a "lopsided" house hack where my space is a very modest 1 bed apartment/mother-in-law while the rental portion of the house is a 3/2. 

Happy to provide more insight if you have specific questions. Welcome to Texas!

Originally posted by @Brooke Noth :

Hey Frank,

I have a great realtor that I can introduce you to! They specialize in house-hacking in the Houston area. I'll message you the contact information. 

Thanks,

Brooke

Hey Brooke,

I'd be interested in receiving a few of those house hack opportunities as well. I'm currently targeting the 610/59 intersection on up to the i10/610 intersection. Could you send me your agent's contact information?

Thanks,

Faraad

Originally posted by @Brian Nel :

Hi Frank. I know this thread is a bit old but I assume you're still looking. Reinforcing what others have said, you will have a substantially more fun time in Houston if you live in/near the West side of the 610 loop. Unfortunately it may be very difficult to find a duplex in this area at your $200k price point - I certainly didn't see anything I would consider livable in the area I've described at that price but then again there's LOTS of properties here. 


I am also a ME and house hack a duplex in the area. The way I made the numbers work is something you might consider a "lopsided" house hack where my space is a very modest 1 bed apartment/mother-in-law while the rental portion of the house is a 3/2. 

Happy to provide more insight if you have specific questions. Welcome to Texas!

 Looks like we're filling this thread up with ME's, as I'm looking for the same type of opportunity you're discussing Brian. I'm currently living in an apartment inside the loop and was looking for duplexes to house hack, but quickly realized it's hard to find anything worthwhile in the areas young professionals want to live. I've been running numbers on a combination of Airbnb and potential long term rentals on a house with a garage apartment. 


If you don't mind me asking, where is your house hack located? 

Originally posted by @Cullen Hairrell :
Originally posted by @Brian Nel:

Hi Frank. I know this thread is a bit old but I assume you're still looking. Reinforcing what others have said, you will have a substantially more fun time in Houston if you live in/near the West side of the 610 loop. Unfortunately it may be very difficult to find a duplex in this area at your $200k price point - I certainly didn't see anything I would consider livable in the area I've described at that price but then again there's LOTS of properties here. 


I am also a ME and house hack a duplex in the area. The way I made the numbers work is something you might consider a "lopsided" house hack where my space is a very modest 1 bed apartment/mother-in-law while the rental portion of the house is a 3/2. 

Happy to provide more insight if you have specific questions. Welcome to Texas!

 Looks like we're filling this thread up with ME's, as I'm looking for the same type of opportunity you're discussing Brian. I'm currently living in an apartment inside the loop and was looking for duplexes to house hack, but quickly realized it's hard to find anything worthwhile in the areas young professionals want to live. I've been running numbers on a combination of Airbnb and potential long term rentals on a house with a garage apartment. 


If you don't mind me asking, where is your house hack located? 

My property is in the Heights. I found it to be a good area for many reasons (including wanting to live there personally) but of course the age of homes in the area oftentimes lends itself to if you're likely to find an affordable duplex at all. For example, it's unlikely you would find one in East Downtown. There were few/no original construction duplexes in the area so short of doing a rehab into a duplex you're looking at new construction and I haven't seen any developers doing new construction duplexes in those areas. They're all the 2-4 story skinny town homes we're so familiar with. The exception to this case would be some of the production builder floor plans that include an efficiency with "private" back door access on the bottom floor or a garage apartment as part of the new construction.

I found some older duplexes farther towards West U area but the cost was way high in relation to the disrepair of the property due to land value. The Heights is where you have a good chance to find one due to relatively consistent construction through the last 50 years on parcels of land that (at least started out) at a decent size, not those subdivided postage stamps in Rice Military. 

Edit: Since there are a few people here with the same goal, I thought I might share some of my learnings from the year I spent researching how to accomplish this myself. 

  • House hack only works to be even close to cash flow neutral (live for free) inside the loop if you are renting a significantly larger portion of the home than that you are living in. 
  • Most worthwhile homes to house hack in the loop are $350k min. I would be very surprised if you can find something with two legitimate dwellings in an A or B neighborhood for less. 
  • Consider creative approaches such as an older home with rental potential on a larger parcel of land that enables you to build "your" portion of the home in the backyard for example. Utilize Houston's relaxed zoning and code to your advantage. 
  • Zillow (HAR doesn't support unfortunately) keyword searches such as AirBNB, Mother-in-law, garage apartment, rental income, etc can find you neat properties
  • Look into the financials of buying and subdividing land (it's lucrative - why do you think so many developers do this?)
  • You may be able to accomplish what you want to do with new construction. I got a quote to build a "Houston desirable" 2000 sq ft town home with 500 sq ft garage apartment from a "off the shelf" floor plan for $300k on my own lot. If you find land in the area you want and can make the financials work you might have a new build rental home with close to $3k of monthly rental income and a place to live for yourself. 
  • A garage apartment can be added to most lots with the space (not barring flood, deed and HOA) for $75-125k.
  • Speaking of flood, there was new code passed in September last year as a result of Harvey. It changed the building requirements for many lots in the loop especially near the Bayous. In my opinion much more restrictive flood zone code devalues these properties as it will seriously preclude investors from continuing to improve properties and make additions such as garage apartments due to additional cost in building and lot prep. 

Those are a few of the top of my head. Glad to answer other questions as well. 

That is awesome Brian, thanks for all the good information! I love that reached out to a builder to get new construction quoted. That's a great idea that I can imagine many young investors are intimidated by. I now know who to reach out to if I come up with any Houston house-hacking questions. 

Funny, seems like this thread just keeps breeding house-hacking interested ME's, as I am one as well, I've been listening to the past BP podcasts after my brother turned me onto them, and now trying to get involved in other ways to continue moving forward. 

@Tyler Dreher , and @Brian Nel , thanks for y'all's input, that's good information to know as I'm starting out. 

@Brooke Noth , could you please send me that agent's info as well, that would be a really beneficial connection if it all works out well. 

@Brian Nel - Thanks for the helpful info. I'm also interested in house hacking but with our budget of around $250K..not a whole lot of MFs available but will have to search the terms you mentioned in Zillow.

Do you find it worth while to buy cheap townhomes/apts? Considering there are some in half way decent areas (Sharpstown, Braeburn, Alief) where you could buy 2-3 apts for the price of one multi family. I know they don't appreciate like MF and SFH do- but wondering if buying up these smaller apartments and renting them out is worth it or a headache?!

You can get a loan with just an offer letter. But you'd need the first paystub before closing.
Min 3.5% down for duplex going FHA on owner occupied. But conventional will require 15% down just because of property type: duplex.

Hey guys! I just wanted to chip in a little piece of advice to help with this kind of search. Realtors can search by keywords in the public remarks and agent remarks in MLS. If you have a realtor you're working with to buy, ask them to search for keywords like "garage apartment", "in-law suite", "guest suite" in addition to your other criteria, especially since multi-families are hard to come by in Houston. I'd love to help if anyone would like a search like this set up in MLS. My husband and I are actually looking to buy a house hack too in the next 3-6 months, after we get our current house ready to rent out.