House Hacking in expensive markets - MA and RI

[Tim Holt]

Hello! I am a new investor looking to purchase my first property in Massachusetts or Rhode Island. I have built up enough savings to purchase a multifamily property with an FHA (3.5% down) loan or Fannie mac (5% down) loan. I would like to house hack as my first real estate purchase/investment.

My question is, in today's market, is house hacking still a good option? I am ok with the property not cash flowing right away, but I would like my living expenses to be minimized by a lot if I am house hacking. Ideally, I'd like to live in the property for 1-2 years, and keep it as a long-term rental property when I move out. Therefore, the property would need to cash flow when I move out and rent out all units.

Any thoughts and/or advice is greatly appreciated, thanks!

[V.G Jason]

You appear young, Tim. If so, then yes this is quite a solid option. I would hesitate to say 1-2 years to rotate out but closer to 5 years, and ideally I'd try to get the downpayment higher to at least 10%.

I understand your areas though-- they're expensive. It's a low barrier to entry and a good option for you, I would highly and I mean highly recommend you focus on location. If you really want to do this right, be a bit scrappy buy the ugliest in the best neighborhood and slowly fix it up over the years.

Imagine buying the worst triplex in the best area. Living in the worst unit each year and fixing it up-- the equity gain is just going to be phenomenal. You will reap the rewards.