House hacking a BRRRR ? Multi family with BRRRR ?

Question

Planning on doing my first real estate deal using the BRRRR method, however I would need somewhere to live. I was planning on purchasing a duplex using the BRRRR method, this way i can house hack and live in one of the units.

A lot of BRRRR examples I have looked at are most single family homes. I don't want to try do to much in one deal and don't want to go backwards.

Has anyone done anything similar ? Is there any added risk ?

Or should I just focus on single family and forget about house hacking.

Any feedback is helpful !

Dave Foster · Answer

@Nick Mazziotti, Your plan is awesome!  The more methodical. approach of the BRRRR method has been proven (under different names) for centuries.  The duplex purchase with the house hack will allow you access to the most favorable financing.  and it still lets you treat it like an investment.

Fast forward 1 year.  You'll have satisfied the residency requirement for your FHA primary loan.  And you can buy another with the same favorable financing.  Back fill your old unit with a renter.  And then refi and buy yet another property.  Make this one a SF if you want.  1 year - 3 units - 5 doors - and all with the most favorable long term financing you can get !!!!  What's wrong with that picture.

Sanat Bhandari · Answer

@Nick Mazziotti I think you might be confusing house hacking and BRRRR method. What you're describing is a house hack where you live in one of the units and rent out the others.

You can absolutely BRRRR a duplex as well. It is a fairly common practice to house hack a duplex and then refinance a couple years down the line once you have some equity (both through rehab and appreciation) built into it.

This strategy is probably the least risky investment since you'll be purchasing the property as your primary residence.