Anything I should be looking out before getting first HouseHack?

[Justin Segarra-Santiago]

I am looking into getting my first house hack deal, I am eager to get into real estate and house hacking seems like my best option at the moment. I've consumed countless hours on content like books, podcasts, videos, etc., and I am ready to pull the trigger. I am looking into duplex's or SFR, small-multi doesn't seem too common in my area so I'll probably end up with a SFR. Any tips on what to look for in your first househack, common beginner mistakes, any tips on getting pre-approved? Anything helps !

[Michael Cross]

@Justin Segarra-Santiago A few points to help you along your path. First is when you go look at a property the most expensive parts of the house are the ones you do not see. So ask yourself the following questions:

1. How old is the HVAC?

2. How old is the roof?

3. Does this house have Vinyl windows or old wood windows that need replaced?

4. Does this property have updated Electrical? Are all of the outlets 3 prong? a 2 prong outlet is a flag that there could/probably is electrical that needs updated. 200amp service with breakers if you are trying to keep things simple (if you have natural gas powered hvac and stove you could get by with less) Knob and tube electric would be a cost to upgrade

5. What kind of plumbing does the house have? PEX, PVC, Copper, Steel, Cast Iron? A combination of PEX and PVC would indicate updated plumbing.

Things like flooring and paint and cabinets are what too many people focus on but those above 5 areas are the expensive ones that will turn a house hack into a house of horrors.

For the financing piece, most lenders will use 75% of the rents of a tenant to offset debt to income ration. This is likely more of a concern for you with house #2 vs house #1. If you are doing an FHA loan your downpayment should be 3.5% to 5% so save up that money. If you live in a more rural area you could use a USDA loan for that first house with 100% financing.

Best of luck and good on you for asking questions so you don't learn the hard way!

Mike