Hello all. I am looking to get the ball rolling to buy into my first investment property through the house hack method with an FHA loan. What would be your first step in doing this? Should I get pre-approved for a loan first? If so, how do I go about doing that? Are there any good threads that give a run down of the general process from start to finish. I am looking to learn to fully understand the process and run through some of the motions now considering I won't be able to buy into anything until around October or so of this year. Thanks!
Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
5y
Hey @Cory Dill, welcome to the Biggerpockets forums! The good news here is this: house-hacking with an FHA loan is a pretty straightforward ordeal. You should get pre-approved, which is as much of an opportunity for you to vet the lender as it is for them to vet you. For an FHA house-hack you'll want someone competent in FHA loans AND investments or house-hack's specifically. Ask casually about people they've helped by 3 and 4 plexes. Ideally your lender wouldn't be learning the ropes alongside you. Please make sure you have a competent agent working through this with you, doubly important if the lender is not wise in the ways of a house hack.
Here're the basic steps:
Start relationship with the lender. Give them as much info as you can up front.
Search for home(s)
Find the one you're ready to move forward on, based on lease rates and the condition of the property
Confirm with lender that you can buy this value house based on your income, debt, and the lease rates
If you get the greenlight, write the offer.
Offer accepted = you're under contract
Under contract = do your inspections and get ready to give the lender a LOT of paperwork :)
Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
5y
Hey @Cory Dill, welcome to the Biggerpockets forums! The good news here is this: house-hacking with an FHA loan is a pretty straightforward ordeal. You should get pre-approved, which is as much of an opportunity for you to vet the lender as it is for them to vet you. For an FHA house-hack you'll want someone competent in FHA loans AND investments or house-hack's specifically. Ask casually about people they've helped by 3 and 4 plexes. Ideally your lender wouldn't be learning the ropes alongside you. Please make sure you have a competent agent working through this with you, doubly important if the lender is not wise in the ways of a house hack.
Here're the basic steps:
Start relationship with the lender. Give them as much info as you can up front.
Search for home(s)
Find the one you're ready to move forward on, based on lease rates and the condition of the property
Confirm with lender that you can buy this value house based on your income, debt, and the lease rates
If you get the greenlight, write the offer.
Offer accepted = you're under contract
Under contract = do your inspections and get ready to give the lender a LOT of paperwork :)
Real Estate Agent · Houston, TX · Member since 2019 · 763 posts · 500 votes
5y
@Cory Dill 100% preapproval needs to come first. Make sure a lender will even entertain your plans and they agree you can financially handle it. Once you have that letter in hand, find a local agent who has experience working with investments and invests themselves. So many agents do not understand the investing side and are not able to provide the right advice to set you up with a deal that matches your plan to reach your end goal
Lender · Boston, MA · Member since 2018 · 171 posts · 137 votes
5y
Awesome @Cory Dill! Glad to see you're looking to get into house hacking, it's by far the best way to get started investing!
Both @Will Fraser and @Karl McGarvey nailed it, so I don't have much to add. I'd just reiterate it's important to build your team with folks that are doing or at least understand what you're trying to do!
Hello @Will Fraser. Thank you for the information this is extremely helpful. I have just spoken with the first of many lenders I plan on consulting with in regard to this process. They didn't seem to have much experience in the house-hacking or investing space so I will continue taking your advice and look to find someone who has done this before with similar intentions to mine.
@Nick Riccio Thank you for responding! I am definitely taking that advice in that I want a team or group of people to work with who have done this many times over. I think that this will help eliminate or ease a large learning curve I would have struggled through if it were just me alone.