Starting Out - House Hacking Advise Needed!

[Madison Legutko]

Hi guys! This is my first post in here and I wanted to start to build my investor network. I just turned 24 years old and have a goal of purchasing my first investment by the age of 25. I am relocating in June and want to utilize the house hacking strategy with multifamily (2-4 unit & FHA financing) . I just spent the last two years being a mortgage loan officers which introduced me to the real estate industry and grew my passion for investing in real estate. It also taught me so much about traditional mortgages but not so much hard money/DCSR/creative financing - much to learn there.

Hoping to make some connections, get some advice on things that I can do to prepare for my first purchase in June (I won't know where I am relocating until mid-march). I currently have about 45k saved up and am continuing to save but I was recently laid off from my job in august and am in the process of finding a new position. 

Since i won't know where the relocation will be until mid march and will have to move in June (apartment lease ends june 31st) - do you think this will be sufficient time to find a property?

What are some challenges I might face? 

All advice is welcome!!

Thank you in advanced

[Kristina Kuba]

@Madison Legutko

If I could do it all over again and not have a spouse and dogs, etc. I would use my FHA loan for a 4 unit building. It is more difficult to house hack later in life if you have a larger family, so keep that in mind.

For example, in Hillsborough (Tampa) an FHA loan can finance up to $809,150 for 4 living-units. That is only 28,000 plus closing costs, well under your budget of 45k liquid to spend. Tampa, the main seat of Hillsborough county, has seen a cool off just like the rest of the country and getting a 4 unit in that price range is attainable.

As you asked, I think the challenge will be the increasing interest rates and if the higher mortgage payment fits in your DTI with your new job. I do think the 90 day time window is ample if you have all your research done now and find a tenured agent who specializes in multifamily / house hacks in the city you desire.

I am also a big fan of Robert Kiyosaki’s ‘Rich Dad, Poor Dad 'and in that book taxes are depreciation and tax savings are critical. If you go the multifamily route, I would recommend doing a cost segregation study within the first 2 years to accelerate depreciation, save on taxes and increase cash flow so you can attain your next investment property quicker.

Best of luck!