Alternative to House Hacking as a First Investment Strategy

[Tomas Muller]

Hello!

My name is Tomas Muller, a future investor in the Charleston, WV area.

I have been analyzing the local markets and have narrowed down a couple of local areas in which I would be interested in house hacking. I have my buy box (duplex or triplex, two beds, one bath), but I have struggled to find properties in the MLS that fit into those characteristics and are located in those areas. I haven't talked to a real estate agent just yet, since I am not quite ready and was using this as an exercise to identify the potential for this strategy where I live.

If house hacking was not an option based on the buy box I have developed, would you opt for a living BRRRR or a different starter strategy? I feel like there are distressed/outdated houses in the area, and BRRRRs could have potential as a first-time buyer strategy. Also, I am interested in implementing this strategy out-of-state in the future, so it could provide me with some level of experience.

If you were in my position, would you do something different when looking for a small multifamily property to house hack? Or would you move on to something that looks more suitable for my market (in this case, the living BRRRR)?

[Ashish Acharya]

Tomas, I don't think there's a wrong answer between house hacking and a live-in BRRRR. It really comes down to which strategy fits your market and your skill set.

If small multifamily properties that meet your criteria are genuinely hard to find, I wouldn't force a house hack just because it's the popular first strategy. A well-bought BRRRR can be a great way to build equity and gain experience, especially if you're comfortable managing a renovation. The key is making sure the numbers work before you count on appreciation or future refinancing.

I'd also think about the tax side before you choose. A BRRRR and a house hack can lead to very different deductions, depreciation, financing, and long-term planning opportunities. Picking the strategy that fits your goals from the start is usually better than trying to force one because it's what everyone else is doing.

One suggestion: I'd still talk to a local investor-friendly agent now, even if you're not ready to buy. They'll quickly tell you whether your buy box is realistic or whether it needs to be adjusted based on what's actually trading in your market.

Happy to connect!