House Hacking Expensive Markets - Redondo Beach

[Taylor Stone]

I'm looking to house hack in the South Bay (Redondo, Hermosa, Manhattan Beach) which is a fairly expensive market. I was renting there for several years but now own a house down in Long Beach. I am looking at 2-4 units in the 1.5mil-2mil range. I will probably convert my primary into a mid term rental as I ideally don't want to sell with my sub 3% interest rate.

Any tips on house hacking in a more expensive market? I obviously know I will not be living rent free so I am comfortable coming out of pocket $4-5k a month. Are there any loan products you have seen that require less than 20% down? How hard will it be to qualify for a loan if the mortgage is ~10k a month? I have 2 rentals in Florida which I bought in 2022 and 2023 so I won't have 2 years tax returns to show and my primary obviously won't have any mid term rental history. I am not looking to move for approximately 6-12 months but at this point down payment would something like $100k cash, $120k HELOC, $100k 401k loans, rest from family. Cash could fluctuate up or down depending timing.

Thanks!

[Tanner Pile]

@Taylor Stone You can still do a FHA and even 5-10% conventional loans in expensive markets. If you bought in an area that would be good for a STR or MTR I would try to do that to help with the mortgage coverage.

If you go for 3-4 units the typically require 75% the rent of the other units to cover the mortgage. Some lender may be different so talk to a few lenders to see what options they have and which one is going to be the best to help you in this situation. 

Good luck!