House Hacking in California, more specifically San Diego, Thoughts?
Wholesaler · San Diego · Member since 2026 · 11 posts · 2 votes
House Hacking in California, more specifically San Diego, Thoughts?
20 Replies
- Member since 2017 · 44 posts · 20 votes6d
Christian, im not in CA so I cant speak to San Diego prices. but you already said the thing that makes it work in an expensive place. you two share a room and rent out the rest.
do it by the bedroom, not the whole house to one group. thats how I run mine. every person is on their own lease with their own rent. my rooms go $600 to $775 each in a much cheaper area than yours. four or five rents on one house adds up to a lot more than one tenant pays for the whole place.
so shop by bedroom count. a 4 or 5 bed with 2 baths or more and enough parking. before you offer, look up what single rooms near that house list for on facebook marketplace, times the rooms you'd rent, and put that next to the full payment.
two things to check early. ask your lender how FHA works with both of you on the loan and how long you have to live there (a year, far as I know). and look up the citys rules on renting rooms at that address.
its more work than one tenant though. you furnish it and the utilities stay in your name. how many bedrooms are you thinking?
- Wholesaler · San Diego · Member since 2026 · 11 posts · 2 votes6d
Thanks, this is really helpful. Renting by the room is the piece I was missing.
We're thinking 4 or 5 bedrooms with at least 2 baths, so we'd share one room and rent out 3–4. I ran rough numbers for our area and the room rents probably cover a bit over half the payment here, so it'd lower our housing cost more than cash flow. We're also looking at Arizona, where the numbers look a lot closer to covering the whole thing.
A few questions if you don't mind:
When you were living in yours, did the room rents cover the full payment, or were you still paying some yourself?
How do you handle utilities? Built into the rent, or split?
Where do you find and screen tenants? Facebook Marketplace, or somewhere else?
Anything you'd do differently on your first one?
Appreciate you taking the time.
- Lender · Peoria, AZ · Member since 2026 · 21 posts · 7 votes6d
Christian, sharing a room and renting out the rest is what makes this work in a pricey area, so you're already thinking about it the right way. A few financing things worth sorting out early:
1. Decide if you're both going on the loan. With two borrowers, both incomes, credit, and debts get reviewed, so it helps to know where each of you stands before you shop.
2. Ask lenders how they treat rent. Expected rent from a 2 to 4 unit property is handled differently than renting rooms in a single family house, and that can change what you qualify for.
3. If you look at 3 or 4 units, ask about the FHA self-sufficiency test. It compares the rents to the full payment and can rule out some properties that look fine on paper.
4. Since you have rehab money set aside, ask about an FHA 203(k). It can roll repairs into the loan so you keep more cash in the bank, though it adds some steps and paperwork.
5. Look up the FHA loan limit for San Diego County for the unit count you're targeting.
When you compare lenders, get quick quotes from two or three around the same time. Rates float until you lock, and a formal Loan Estimate only goes out once your docs are in. Good luck to you and your brother.
- Wholesaler · San Diego · Member since 2026 · 11 posts · 2 votes6d
Thanks, this is a great checklist. We're planning to both go on the loan, although if one of us could qualify alone, it lets the other use the FHA loan for a second property, so I'll get our credit and debts lined up before we talk to lenders.
A couple of follow-ups:
Between a 2–4 unit and a single-family where we rent rooms, which would you lean toward for first-timers, given that lenders handle the rent differently?
On the 203(k): is the limited version usually enough for cosmetic work like floors, paint, and a kitchen? And how much does it add to the closing timeline compared to a regular FHA loan?
Any lenders in San Diego you've seen handle 203(k) or multi-unit FHA loans well? It seems like not every lender does them.
Appreciate it.
- 6dJuan YepesBusiness MemberLender · Miami, FL · Member since 2025 · 125 posts · 35 votes
Hi @Christian Romero ,
I helped a client complete a house hack purchase recently in Sacramento. You actually can use an FHA or conventional and roll the renovation costs into the loan if you prefer instead of coming out of pocket for the renovations. Happy to connect and explore your options if you're interested.
Helm Mortgage Corp - Juan Yepes, Director5126 Reviews- Wholesaler · San Diego · Member since 2026 · 11 posts · 2 votes6d
Thanks! That's good to know. We're probably about a year out, but I'd like to understand the options now so we can plan.
A few questions:
On the conventional side, is that the HomeStyle renovation loan? How does the down payment compare to an FHA 203(k)?
For your Sacramento client, roughly how much rehab did they roll in, and how much longer did closing take than a normal purchase?
Do you lend in San Diego County and Arizona? We're weighing both.
Happy to connect closer to when we're ready to buy.
- Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes6d
I never would have been able to start my house hacking journey had I not started in California. You are dealing with bigger numbers for appreciation (3% on a $1M asset versus 3% on a $100K asset).
Right now, here is where I'm advising my house hacking clients:
-3+ bedrooms for condos/townhouses: They become house alternatives when people can't afford single family homes.
-Creating bedrooms in an existing floor plan: Because it is all about bedroom count, putting up walls and closets is fairly inexpensive in comparison to the amount of rent you can get.
-Utilizing the FHA 203(k) to get illegal ADUs permitted. I helped a client do this a few years ago on a 2 bedroom ADU that wasn't permitted. It cost her about $100K but it would have cost her $200K+ considering there was an addition, etc.
I was interviewed on the Bigger Pockets Rookie podcast recently where I discuss most of this.
Good luck!
- Member since 2017 · 44 posts · 20 votes6d
Christian, half the payment covered in san diego is still a win. thats your housing cost cut in half while you own the house.
mine are run as rentals, so I dont have a live-in number for you. but your math is the right way to look at it. room rents next to the full payment.
utilities stay in my name. I cover the first $100 of the bill each month and split the rest between the housemates by the days each one lived there. its written in the lease so nobody argues about it.
finding people: every room gets its own listing with its own rent and pics. everybody fills out the same application, shows ID and income, and I check references. since you two will live there, ask about their schedule and how often they have people over too.
what I'd do from day one: put the house rules in the lease, not on the fridge. guests, quiet hours, who cleans the kitchen. and walk each room with them and take pics the day they move in. makes the deposit talk easy later.
- Member since 2023 · 56 posts · 24 votes5d
If room rents cover a bit over half, compare what each of you would pay toward the rest with what you each pay in rent today. If it's about equal or less, it's still a win, because you're building equity instead of paying a landlord. Two ways to close the gap: look for a place with an ADU or junior ADU, or one with a den you can convert into another room. With both incomes on the FHA loan your range widens, so make sure the payment still works if one of you moves out.
- Member since 2026 · 1 post · 0 votes5d
House hacking can absolutely work in San Diego County, it just takes planning. FHA allows two to four unit properties as long as one of you lives there, and lenders can often count part of the expected rent from the other units toward qualifying. With two buyers, it's worth deciding early whether you'll both be on the loan, since both incomes and credit histories would be considered. If you're planning rehab, ask about renovation loan options that roll repair costs into the purchase. Getting pre-approved now will show you what price range and property types make sense. Happy to walk you through your options if you'd like.
- 5dDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
I live in San Diego and am familiar with most of the rules and numbers.
fha cannot be used at max LTV on triplex to quad due to self sufficiency tests.
Even on single and duplex I question if fha is best option. FHA never drops pmi. It has tougher criteria and often slower criteria for that 96.5% LTV. I think most will be better off using 95% conventional OO LTV.
There is state prop to get 97% LTV if it passes.
I would not spend more than $20k to legalize a safe unit. Why would you? It already is protected. See sb13. The protections were extended I believe this year (maybe it was last year). Is there any chance that state protection of safe unpermitted units is going away anytime soon? I have heard the author of sb13 and can state with confidence that protections are not going away.
Rent by room is a lot of effort. This can optimize revenue, but it is far from passive.
Even if rents cover the full Pit (this may be possible with rent by room)i, you likely would likely be better off initially renting. You need to have a long perspective. A few years after starting you may be financially better off over renting and it will improve annually.
You can make a lot of money with value adds in San Diego (I have). I have never tried a significant value add while having tenants. I suspect it will present some challenges. Be aware of the potential challenges.
Make sure you know the rent control (SFH excepted) and other laws. Ca AB1482 applies most areas, but city of San Diego and imperial beach have more extreme rent control law. There is also deposit rules, eviction rules, etc. make sure you know the rules better than the tenants. My biggest conflicts have come from those that know the rules. Fortunately, I have known the rules better than they have.
My just turned 24 yo son started his first flip late last week. We had combo closing/birthday party on Sept 30. He ignored some of my advice including starting cheap. It is in bay Ho maybe 500’ from the bay. I am only the bank/mentor and he came with over 50% of the funds. Exciting/scary. I would have never paid as much as he did, but he is excited and has lower expectations of return than I require. Ironic I expect huge compensation for my time/effort but give my time/effort for free to my protégés.
Good luck
- Member since 2025 · 246 posts · 100 votes5d
@Christian Romero San Diego house hacking works best via duplexes or SFDs with ADU potential (FHA 3.5% down). You won't cash flow day one, but tenant rent covers most of the mortgage while you build equity! Best of luck on your journey!
- 5dStacy RaskinBusiness MemberLender · Member since 2022 · 1k+ posts · 508 votes
If you are going to house hack and going to do an income based loan, it's important to speak with a mortgage broker or lender that has an NMLS license in CA when you are closer to buying. That way you will get an idea for what you can qualify for. A mortgage broker can present more options.
As far as having roommates, it's important to set expectations up front about what kind of living space will it be- are parties allowed or frequent overnight guests? What are the rules around cleaning, etc? Having house rules written down and having the roommates sign off on them is important. People will often divide the utilities amongst the roommates so people can see the bills and have an incentive when possible to conserve electricity etc instead of putting it in the rent as unlimited use.
Also, doing tenant screening before renting to roommates or tenants is key. It's important to think about it on the one hand as how to finance the purchase while also thinking about what kind of home environment do you want to live in and how to ensure that you are able to make that outcome more likely. Happy to connect to discuss further.
Bright Skyline518 Reviews - 5dDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
If you're going to use FHA financing, look into the FHA 203(k) option, which allows you to roll rehab costs in the loan.
Then buy the ugliest house you can stand and fix it up!
FYI: 203(k) requires you to get bids & estimates from licensed contractors, which is a good control for keeping a budget.
AFTER you close on the purchase though, you can do all the work yourself.
Logical Property Management4.9459 Reviews - Property Manager · Melbourne, FL · Member since 2019 · 288 posts · 129 votes4d
The rehab-while-renting part deserves its own plan. Which bathroom and kitchen will everyone use while work is happening? I'd finish the shared spaces before filling rooms if possible. You and your brother may be fine living through a project, but paying roommates need a clear idea of what they're moving into.
- 4dAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
@Christian Romero, one tax point to weigh as you decide between renting rooms and going with an ADU or duplex, since a few replies here are pointing you toward the latter.
Renting rooms inside the home you live in is treated differently from renting a separate unit. With rooms, you can generally still exclude the whole gain when you sell, up to $250K each for you and your brother, as long as you both own and live there 2 of the 5 years before the sale. Only the depreciation on the rented portion is taxed. With a separate unit, like an ADU or the other side of a duplex, the gain on that unit generally isn't covered. In San Diego, where appreciation drives much of the return, that difference can be real money.
On your idea of having just one of you qualify so the other can use FHA later: the exclusion and deductions like mortgage interest generally follow ownership and who actually pays. If only one of you is on title, only that brother gets the exclusion. Decide how you'll hold title and split costs before you buy, and put it in writing.
While you live there, expenses get split between the rented rooms and your space, usually by square footage, and only the rental share is deductible and depreciated.
If you want to run the numbers on rooms vs. an ADU for a specific property, feel free to DM me.
INVESTOR FRIENDLY CPA®5241 Reviews - Woodland Hills, Los Angeles County · Member since 2026 · 17 posts · 2 votes3d
Christian, the financing side is well covered above, so here's a different angle: you're already a wholesaler, so use that skill set to find your own house hack instead of competing for retail listings.
In expensive California markets, a lot of the best first purchases come from the same sources you'd use for wholesale leads:
- Inherited and probate homes. Heirs often want a clean, quick sale of a dated 4 bed house that a retail buyer would pass on. That's exactly the profile you want for an FHA 203(k) plus sweat equity.
- Tired landlords. Owners of older SFRs with a converted garage or a granny unit who don't want to deal with tenants anymore can be open to a reasonable offer and flexible timing.
- Houses with an unpermitted unit. If you go this route, price in the cost and time to legalize it, and confirm with the city that it can actually be permitted before you count that rent.
A few practical notes from doing deals in Southern California:
- Inland North County (Escondido, Vista, parts of Oceanside) usually pencils better for room rentals than the coast, and you're close to San Marcos.
- Get a sewer scope and check the electrical panel on anything older. Those two items blow up rehab budgets more than kitchens do.
- Run your numbers assuming one room sits empty for a month or two each year. Room rentals turn over more often than whole-house leases.
- If your wholesale business and your personal purchase overlap, be upfront with sellers that you're buying to live there. It keeps things clean with the lender and the seller.
Good luck to you and your brother.
- 3dWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
I do believe that it will be possible to house hack in San Diego, although the higher prices of purchasing the property along with the taxes and insurance may tighten things up for you compared to lower cost of living states. I would begin by researching 2 to 4 unit properties near San Marcos and the surrounding areas. If not possible then go out of state.
Good luck!
NETWORTH BUILDERS5236 Reviews - 1dJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Christian, a solid plan for two first-time buyers, and sharing a room is exactly what makes house hacking work in a pricey market.
One thing worth knowing before you compare states: FHA requires you to live in the property, typically for at least a year, so it works best where you actually plan to live. If you stay in San Diego County, the deal has to work on a duplex or a property with an ADU using conservative room rents and a vacancy reserve, so I'd run it at the low end of rents first.
A path I see work: do the house hack at home, get the owner-occupancy year done, then buy out of state as straight rentals once you have equity and experience. In my experience Columbus is still turning up duplexes around $200K that cash flow, so that's the kind of market to study for step two, though I'd always verify rents and taxes on live listings.
I like swapping notes with first-time house hackers, so feel free to connect and I'll share what I'd look at.
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 18hGregory AcsPro MemberLender · MD · Member since 2025 · 203 posts · 78 votes
Hi Christian,
House hacking can still work in California, but the numbers are definitely tighter than in many other states. The key is buying in an area where rental income from the other rooms or units can offset a meaningful portion of your monthly payment while still giving you room to build equity over time.
Since you're first-time buyers considering an FHA loan, I'd spend time comparing different financing options and understanding how much you can comfortably afford before narrowing your search. Having a clear budget and strategy will make it much easier to recognize a good opportunity when it comes along.
I'm a mortgage broker and work with first-time buyers and house hackers. Feel free to send me a message if you'd like to compare your financing options or run the numbers on a property.
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