What is the ideal start to a house hack? 18 year old.

Question

I’m young and want to start my life, I’m a forex trader and have been aspiring to become a REI. I’ve studied a lot over the past few years, but don’t know where to start with a house hack. Any insight in any degree will be a great help! Thank you..

Joe Aquilina · Answer

@Craig Curelop

Thank you for those podcasts! And yes I would be looking into a multi family so I can rent one out or maybe even both and generate some extra income..

Scott Mac · Answer

You need to know how to do this beforehand 100% vs learning it on the fly as (and after) you buy it.

You are putting both your money and your credit profile at risk, and knowledge will reduce the risk.

The Education link at the top has resources for house hacking, and also you need to know how to be a landlord, which means attracting tenants and setting proper rents, as well as being able to know a good financial deal from a bad financial deal, etc...

Another hurdle will be how much loan can you qualify for, and the cost you will have to pay to get the loan.

FHA offers low down payment loans, you might want to look into those.

Don't fall in love with a property, instead find a great deal you can fall in love with--(once you know what you are doing).

Good Luck!

Joe Aquilina · Answer

@Scott Mac

Wow! Thank you so much! I won’t rush it and I will learn as much as I can before. What education link are you talking about?

I don’t know much on how to be a landlord nor do I know much upon loans. I will be studying for quite some time!

Once again thank you Scott. I truly appreciate your time.

Craig Curelop · Answer

@Joe Aquilina - The first step towards starting a house hack is educating yourself. I would recommend listening to the BiggerPockets podcast, reading some of the blog articles, and reading a few of the books if you haven't already. Shameless plug... BiggerPockets has a book on House Hacking that might be a good start :).

Once you have educated yourself, your next steps will be to save up enough for at least a 3% down payment plus a few thousand dollars in reserves. I am in the Denver market and personally, I like to have $10k in reserves per property.

Once you have this, you can then reach out to a few agents and lenders in your area to get you started on seeing what you can afford and what houses make the most sense for you.

Evan Polaski · Answer

@Joe Aquilina.  Save, save, save.  But to start I would look for a house that you qualify for alone and can afford with no roommates.  Then, find a roommate, or two if possible, and collect your rents.  Use those rents to save for another property.

Joe Aquilina · Answer

@Jaron Walling

Great insight! Thank you Jaron.

I will definitely keep that in mind and will for sure live below “standards”.

Jaron Walling · Answer

@Joe Aquilina Regardless of what direction you take it's important to live below your means and start saving money. By the time you're my age the markets will different but you'll be prepared! You can develop a game plan and build your credit at the same time.

House hacking is trendy now but give it 5 years. Maybe you'll think it's a terrible strategy.

Craig Curelop · Answer

@Joe Aquilina - The BP podcast is honestly all you need. But there are TONS out there. Other good ones are Joe Fairless' Best Ever Podcast as well as the "The Real Estate Guys." There are some house hacking specific podcasts out there as well that are also good!

The 3% down is a conventional loan. Used for single families. If you decide to do a 2-4 unit, then the 3.5% FHA might be best.

I like to have $10k in case things go wrong. Need a new furnace, new roof, etc.

Joe Aquilina · Answer

@Craig Curelop

Awesome! Thank you Craig. I will most definitely check those out. Currently listen to podcasts on Apple Podcasts... do you know any good podcasts for that? Also, does the 3% down apply to the FHA loan? Or would that be separate? And one more thing, when you have cash in reserves (like 10k) as you said, is that used for the property? Or is it used for when there is no tenant? Or both?

Once again thank you Craig for your response and your time!

What is the ideal start to a house hack? 18 year old.

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