Is HouseHacking in the Bay Area realistic?

Question

Hi all,

I am moving to the Bay Area next month, and my preferred strategy would be to get an FHA loan and buy a 2-4 unit multifamily property. Do you have any experience doing that in the Bay Area? I will have to work there and I don't want my commute to be longer than 30 minutes, just looking to see if anyone invests around the area (e.g., Sunnyvale, Mountain View, Los Altos, or even farther away by Morgan Hill) and what numbers are they seeing?

I don't expect to cover the entire share of the mortgage looking at property prices if I buy a 4plex but would be good to connect with folks that have experience in this area.

Jake Andronico · Answer

@Miquel Julia

Love the idea! I've grew up in the Bay Area but moved to Reno, NV to live and invest. Wanted to be close to the Bay Area and Tahoe.

I've house hacked twice here and it's changed my life. Here's a rule of thumb:

The more comfortable you need to live, the worse the numbers will be. The more uncomfortable you're willing to live, the better the numbers will be.

Here's what I learned and what I regret after doing it twice: https://www.biggerpockets.com/forums/922/topics/1133476-hous...

Rick Albert · Answer

I've house hacked twice in Los Angeles, so I know what it is like to be in an expensive market. I also grew up in the Bay Area, so I'm familiar with these areas (very high level). A couple of things to keep in mind:

1. FHA will require a self sufficiency test when buying 3-4 units. This means the property needs to cover all the bills once you move out (75% of the rents). Because of the price point, this is unlikely.

2. Don't expect a deal. Keep in mind if the numbers work at 3.5% down, why wouldn't an investor putting 20%-30% down buy it? Be humble and realistic in your numbers.

3. Investing in high priced markets is one of the fastest ways to build net worth. You buy a property for $2M and with 3% appreciation, you made $60K in equity. Think about how many small properties in the mid west you would need to accomplish the same thing?

If you want a referral for an agent let me know. I worked with one to sell a property and it was a good experience. He is also a flipper and investor.

Chad Hale · Answer

@Miquel Julia Househacking is a great idea in the bay area.  Commute traffic is interesting in the bay area.  Physical distance (miles away) is not the only measurement.  Best to look at your work address and then monitor commute times from different areas and at different times of the day.  Agreed with @Wilson Lau commuting from Morgan Hill is tough. That's almost 30 minutes to Mountain View with no traffic.

Is HouseHacking in the Bay Area realistic?

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