BRRR first? or House Hacking first?

Question

Hello I'm a 27yr old newbie in RE investing and I recently flipped one house and got 125k in my pocket.

As I didn't have my residential house for myself, I think it is great time to start house hacking. But also thinking BRRR too.

As of now, what option between BRRR and House hacking is better you think in my case?

Want to hear some of great investors opinions.

Wale Lawal · Answer

@Hyeseong Park

Congratulations on your successful house flipping! Both house hacking and BRRR (Buy, Rehab, Rent, Refinance) are viable real estate investment techniques, and the decision between them is determined by your financial objectives, risk tolerance, and personal preferences. To help you decide, here's an overview of both options:House Hacking Advantages: Immediate profession, easier financing, potential for rental revenue.Cons: limited to multifamily properties.BRRR (buy, rehab, rent, and refinance):Pros: Equity building, a variety of property options, passive incomeCons: Higher upfront expenses and longer duration.If your primary objective is to lower personal living expenditures, house hacking may be a better alternative. If you want to develop wealth over time and generate passive income, BRRR may be a better fit.Ultimately, both strategies can be lucrative. It might also be worth consulting with a local real estate professional or financial advisor who can provide insights tailored to your specific circumstances and the local market conditions.

Good luck!

Jake Baker · Answer

@Hyeseong Park

I agree with @Liam Naughton that a house hack is a great option. My first house hack catapulted me into real estate. Buy a new house hack every few years, and continue to rent out the previous one.

I have flipped countless houses but my few house hacks have made an instance return compared to the effort that I put into them.

Happy investing!

Liam Naughton · Answer

Hi Hyeoseong!

If you have your FHA loan available I'd recommend setting up a house hack and then going for a BRRRR.

You could consider the option of going for a BRRRR first while you wait for interest rates to come down on an owner-occupied purchase. The timing on that might line up pretty nicely if you can do a cash-out refi in 6-9 months.

My personal opinion is that you should start the timer on an owner-occupied, low-down, investment asap. It will be a cornerstone to the foundation that builds your portfolio.

BRRR first? or House Hacking first?

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