House Hacking- Any Advice Please
Hello,
I've been approved for (max) $575,000. My goal is to purchase my first multifamily property before the end of this year. I will live in one unit and rent out the rest. I have a Tesla and I think it would be good to leave the home charger connected for any future electric vehicle tenants as well.
I just don't know where to start. I'm open to a fixer upper or something more finished. I'm also open to living in Northern NJ, Rockland, Westchester, or CT.
Does anyone have any guidance on which area I should start in? Any advice is greatly appreciated.
Thank you,
Chris
Just make sure it's a location that you're okay living in. It doesn't have to be a homerun deal in the first year.
@Justin Brickman Thank you, I'm coming to that conclusion as well.
#2 Managing Your Property Contributor
think about layout and number of bedrooms and bathrooms. If you are sharing the home with strangers, they may be fine sharing a bathroom with each other, but do you want to? I'd also think about getting a cleaner in once every week or two to ensure common areas are cleaned.
Hey @Christopher Williams - nice to get preapproved for such a good amount! I would make sure that the place you buy is able to be a good fit for your day to day life (job) - I did a house hack in a duplex that has turned out to be very lucrative now that I have moved out, but living there was a bit challenging for a bit. (I am single though and was able to make do.). Also, I always try and do my premarket research of an area to see what rents for the downstairs (or other half would be) that I am not living in, and see how much - if not ALL of my mortgage could be covered. Where are you currently living?
I'm an investor and investor-agent in Northern NJ. Would be happy to connect and talk through your investment goals and options in this area.
Quote from @Theresa Harris:
think about layout and number of bedrooms and bathrooms. If you are sharing the home with strangers, they may be fine sharing a bathroom with each other, but do you want to? I'd also think about getting a cleaner in once every week or two to ensure common areas are cleaned.
Thank you for the advice. I would definitely want a duplex property where the units are separate with privacy. I'm debating Airbnb and hiring a cleaner as well.
Quote from @Kuriakos Mellos:Very encouraging to read. That's exactly what I am trying to accomplish, I just need to start. I'm currently in Bedford Hills, Westchester County. Too funny, single guy as well! I think that works to our advantage for what we are doing here. I'm trying to become more familiar with researching the areas and the rents. I know that's extremely important. I would love for most of the mortgage to be covered.
Hey @Christopher Williams - nice to get preapproved for such a good amount! I would make sure that the place you buy is able to be a good fit for your day to day life (job) - I did a house hack in a duplex that has turned out to be very lucrative now that I have moved out, but living there was a bit challenging for a bit. (I am single though and was able to make do.). Also, I always try and do my premarket research of an area to see what rents for the downstairs (or other half would be) that I am not living in, and see how much - if not ALL of my mortgage could be covered. Where are you currently living?
Hi @Christopher Williams House Hacking is great way to go. If done right NJ can be a great place to invest. Being open minded to fixer uppers is huge, the value add potential and rent increases is a great way for getting to second house hack quickly.
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Real Estate Agent New Jersey (#1326442)
- https://shawnmcenteer.exprealty.com/
Don't exclude single family house hacking. I'm on my second one... I recommend it as a nice alternative to multifamily.
When I was searching for my house hack I was priced out of the area that I wanted to live in Multi Family. I ended up purchasing the largest square foot home I could afford in the area I wanted to live. I rent room by room and make more from rent than I would if I rented the place itself as a regular rental. @Jake Handler I second to not exclude single family house hacking, but I realize that it is also a lifestyle that not everyone is willing to live. Best of luck on your house hack!
#1 House Hacking Contributor
- Real Estate Agent
- Colorado Springs, CO
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#1 House Hacking Contributor
- Real Estate Agent
- Colorado Springs, CO
@Christopher Williams Nice man! House hacks are great. I would also encourage you to use your rent avoidance in your numbers. That is reasonable to me as you are saving that in rent every month.
For house hacking my criteria consists of a couple things. First, it must allow you to cash flow or live for free while you live there. Second, It must have a good exit plan to cover your mortgage and make $200+ a month after you move out (often times much more) and do your next house hack (if your goals are to scale).
Here is what I look for in single family homes to make that happen:
1. An easy way to split into multiple units: a walk out basement, an ADU, or a garage that could be converted to an apartment, multifamily - this allows for airbnb or more rental income to a long term tenant
2. 4 or more bedrooms (or 3 bedrooms with the potential to easily add more) -
For resources I really like the following House Hacking episodes on Bigger Pockets Podcast: #352, #252, #350, and #249.
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Real Estate Agent Colorado (#100092341)
- 719-290-4640
- [email protected]
I agree with previous posters, I would hone in on where you want to live first, and then hunt for deals in those particular markets. If you are in Bedford Hills now, that is a good potential area to look, and I think you could find a multi within your budget around there, Mt Kisco, etc.
Thank you for the advice @John Bucci. I am realizing I'm looking way too much into this and I'm really looking for my first property (with other units) to live in for a while. I am continuing my search!
Thank you all that specific advice @Ryan Thomson! I really appreciate it all. I've been looking into multi-family properties, but the idea of splitting a single family has crossed my mind a few times due to these high prices. I know there is a lot to learn with that but excited to figure this all out one step at a time. I really want my units to have a modern and fresh appearance washer, dryer, dishwasher etc... The vision is there I just have to make it happen. I will check out the Bigger Pockets Podcasts this weekend!
Thank you @Jake Handler! I am going to start exploring this option a little more as well. I really don't want to spend a ton on a very large downpayment.
Thanks for the advice @Levi Dobson! Yeah I'm a little iffy about the renting room by room arrangement, but I definitely see how that generates more income. I'm looking into single family house hacking as well.
It sounds as if you plan to live in the unit, since you referenced your Tesla. I would look into books about House Hacking. Check out @Patrick Allen. He has a House Hacking book that explains the process. That might help you decide what you should do and what strategy are you looking to deploy. Here's a link for the book: https://www.amazon.com/House-H...
@Christopher Williams for house hacking I make regular visits tho the Habitat for Humanity Restore Store. I like to get light fixtures and upcyle them if you have the time. I also always shop for discount appliances on fb market and slight cosmetic damage at big box stores. I like to start and finish the unit that will make me the most money (larger unit or unit I plan to STR). I know you mentioned Westchester but Newburgh in Orange County $575k can go quiet far and depending on inventory can get you turn key.
Quote from @Christopher Williams:
Hello,
I've been approved for (max) $575,000. My goal is to purchase my first multifamily property before the end of this year. I will live in one unit and rent out the rest. I have a Tesla and I think it would be good to leave the home charger connected for any future electric vehicle tenants as well.
I just don't know where to start. I'm open to a fixer upper or something more finished. I'm also open to living in Northern NJ, Rockland, Westchester, or CT.
Does anyone have any guidance on which area I should start in? Any advice is greatly appreciated.
Thank you,
Chris
Hey Christopher! Im an agent in the Hudson Valley, and $575k goes a loooong way just a bit further north than westchester/rockland. Monroe, Newburgh, Middletown... those are all places in Orange Co, NY that your price range would get you what you're looking for. Let me know if I can help in any way!!
If you could find a multifamily, that'd be great to house hack. You could go with a SFR but consider the back end/exit strategy as well. Ultimately, you're going to want to find something that has potential to build equity through rehabbing it. And you'll want to get your money back and have the rental income help carry you into the next deal. If you house hack a SFR, it may be difficult to do so. Depending on the lender, they may not let the income offset the mortgage payment as they would if you were owning a multifamily. You can scale a lot faster through forced equity and without DTI limitations with multifamily. Something to consider. I wouldn't say pass on a base hit SFR, but ideally you'd want to go with a multifamily over a SFR. My first purchase was a SFR and we sold that and used the profits to house hack a 4plex and that has sky-rocketed our life completely. Hope that helps making your decision!
Hi @Christopher Williams how is your search going?
@Lawrence Potts Well said Lawrence. I'm still learning but I'm definitely on the same page as you. I'm looking for a multifamily at a decent deal, in a good neighborhood that I can rehab and live in. I've crossed SFR off the list a month ago. Narrowing down on what I want.
@Michelle Pepe Hi Michelle, I would like to talk if possible. I was working with someone else in Northern NJ. Although, something doesn't feel right and I'm trusting my gut at this point. I'm looking to get moving on this and find something before the end of this year. Any possible help would be greatly appreciated!
@Yon Jones great idea. I really want to be closer to NYC due to my career and opportunities. Although, I am really aiming for lower Westchester, I know its expensive but I'm keeping an open mind on this journey.
@Michaela Chatman I will look into this one. I've been listening to audiobooks on my free time. I'm getting to the point where I'm ready to take action. But I'm always up for a good read and taking more notes. Thank you!