All Forum Posts by: Nick Riccio

@Victor Ramirez congrats on getting started! I'd second what @Lior Rozhansky said. You'll certainly want to try to conserve your capital so a low down payment, owner-occupied loan is often a great way to start.

There are many great areas in MA but I think you'd want to figure out your price range, proximity to work if that's important, and then figure out the neighborhood that works!

1) When adding the income for your total net rental income do you include the unit you're going to be living in? 

- Yes, total rent for the building, but a vacancy factor of 25% will be applied to the rents.

2) Can you use a non-conforming or in-law (basement) apartment towards that income? No - it needs to be a legal unit.

@Natalia Soares yes I'm referencing FHA and conventional low down payment options.

@Natalia Soares without knowing your exact scenario, you should be able to purchase again, owner occupied. You might not be able to use the rental income of your vacating unit to qualify, but if you're in a multifamily you can use the other units for qualifying purposes. 

@Mel Sims I'm a little confused by your post. Are you using FHA to purchase a 2-4 family? If so, you can refinance out of the FHA product into a conventional, and use FHA again (if you're willing to relocate).

@Bradley Padula is correct on this. Can only have one FHA loan out at a time. Either a sale or refinance to conventional would make you eligible for FHA again.

@Timothy Walsh Great share - and welcome! I'm also a former Eastie resident, now living in Southie.

my wife and I have spent the last 3 years house hacking in Boston, and it's the best decision we could have made.

To @Ray Hurteau point, construction costs are absurd, and right now, we choose to do as much work ourselves. This certainly helps as we are able to keep costs down. The tradeoff is our time - which we are working to grow out of as we scale.

Happy to help anyway I can - and best of luck to you and your wife. Also, congrats on the marriage!

@Andrew Mowe Looks like you've already received some great feedback from others. I'll add my two cents as well.

I've been house hacking in Boston successfully for the last three years. In my opinion, value-add is key to make the numbers work.

My first house hack, I converted a two family to a three family. While living there I made about $400 and was living for free.

My current house hack, I added about 900 square feet of living space and an additional 3 bedrooms and bathroom to my rental unit. I'm making about $1,000 per month while living for free.

Most will say the numbers won't work, but if you can get creative - you can make them work. As you mention, if you can live for free, or at least very close, it's a win in my book as when you move out, it should be a profitable asset and you'll be saving a ton of cash while living there. 

My last piece of advice when searching - 3/4 families are subject to a self-sufficiency test if you're using FHA. This means the building needs to be profitable (using only 75% of rents) without using your contributions. This becomes a challenge in Boston - but not to say it can't work. Just be aware that you will need to find a really good deal to make it work.

@Joseph Porter there will be plenty of opportunity in that area, but it will be important to identify your goal and budget first which will help determine the areas you want to look. As @Jeremy Hill mentions, house hacking is a great way to get started. The Worcester area is incredibly hot right now but is certainly under major development right now which will prove great opportunity.

@David Shapira id say you’re on track. Water/sewer for my 3 family runs around $100 per month. I self manage my buildings, but I believe 10% would be high for our area.

Lastly - if you're going FHA, expect the PMI cost to be significant although you'll be able to refinance out once you gain some equity.