Am I Prepared for this?

Question

I just started a W-2 job in June, I have moderate savings, and a car loan. I wanted to house hack next year summed, but is it too soon? Money isnt a huge issue, I would be going into the purchase with personal savings as well as a gift from my parents. I just started getting into real estate a couple weeks ago and I was aiming to be in it by next summer, but I dont plan on staying in the area I’m in for more than 1.5 years from now. I was looking at this first one as “im here right now and I could house hack, it may not be profitable but thats okay I got the experience of buying and landlording”

Eliott Elias · Answer

Buy right now, find something you can eliminate living expenses on for a year or two and rent out your side once you vacate

Brad Jacobson · Answer

I'm a huge proponent of combining two strategies - the house hack and the nomad.

You should take advantage of the opportunity to buy a house, as an owner occupant, with the traditional 3-5% down as many times as you can!  Then house hack it, live for cheap or free. That's always better than renting.

Then, you can combine that house hacking strategy with the nomad strategy and move every 12 months.  It's the easiest and least expensive way to stack properties early on.

I'd suggest you consider buying a short term house hack but also considering how the property would perform as a traditional rental once you move out in a year and a half or so.

Good luck!

Bradley Dosch · Answer

Hey Hariharan, yes you are ready and prepared! Buy the house hack as soon as possible! Don't wait, get started as soon as you can. Live in it for as long as you're there, and then when you move keep it as a rental and house hack in your new location. Your quote at the end is awesome. If you're worried about managing it remotely, just get a property manager. Let me know if you have any other questions :)

V.G Jason · Answer

If you have the funds and you need a place to live in, you're fine rolling the ball now. The issue you are going to face is not being impulsive. You need to find a place that really counts and quantifies as rentable and livable. You need to see it as a place you can happily live and know you can rent easily. Not the first house you see that you like. It has to be a little less emotional than your forever home.

Clayton Silva · Answer

The househack is probably the safest way to start.  You are either going to have to pay rent or pay a mortgage anyway to live somewhere so it's almost a sunk cost!  It's the easiest way to get started and reduce your living expenditure.

Sarita Scherpereel · Answer

Hi @Hariharan Elavarasan Yes, I would definitely start now. Take advantage of the lower down payment programs. I'd buy and hold!

Michael Dumler · Answer

@Hariharan Elavarasan, most lenders are going to want to see at least two years of W2 tax returns. You could start connecting and networking with lenders now though to see what options they may have for you shortly. Most might require a higher downpayment to make up for the lack of work record. Furthermore, I disagree with others. Even though you'll be moving in one and a half years, your first house hack could easily be converted into a long-term rental and will kickstart your investment career. With the right systems and management in place, you mitigate risk and potential issues. That being said, time moves fast, and you need to put in the work now to connect with all major vendors associated with real estate (agents, lenders, PMCs, etc.). If you haven't already, read "The House Hacking Strategy" by Craig Curelop and "Long-Distance Real Estate Investing" by David Greene. Hope this helps!

Vito Ciambriello · Answer

Its never too soon to start investing, the sooner you start the more time compounding you have!

But, with your timeline, it likely doesn't make sense to invest in an area you are not going to be in for more than 2 years.

If you leave the area, the issue becomes managing and taking care of the property when emergencies arise and you are not local.

Am I Prepared for this?

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