House Hack Idea - Need Advice

[Andrew Berardi]

Hi!

I am currently renting a unit in a multifamily house. A few years ago the landlord wanted to sell, but decided not to.

Plan A: is to get in touch with a lender to see if I could qualify for a cash loan. In parallel I want to run the numbers, and see if cash-flow from the other units would be able to pay mortgage/taxes/insurance/etc.

If the numbers seem good…I want to make an offer to the landlord. My goal is to be able to house-hack here, and then move on to other forms of investing in the future.

I know this idea seems like a long shot, so Plan B is to find a deal on a multi-family house, live in one unit and rent the others. After reading BRRRR and listening to the BP Podcasts, House hacking seems like the best way for me to get started in investing. One of the episodes mentioned utilizing NACA to find a house that already has tenants, and moving into it and house hacking as well.

So…does Plan A sound like a good idea? Any advice on how I should go about contacting a lender? Would I need to get in touch with an agent as well to help me close the deal?

Also…whether going with Plan A or B…should I be starting an LLC to put the house under that instead of my name?

I'd appreciate any advice.

Thanks,
Andrew

[Kevin Paulk]

@Andrew Berardi

Reply to Plan A 

You're assuming he would sell or entertain your offer. I would first try and find out more info about the landlord & the property before seeing the lender for plan A. His answers could potentially help you shape a plan for how to go about purchasing or not purchasing the property. The idea would be to gauge his motivation and see what problems he is facing with the property if any. 

A few questions I would ask.

Is he still looking to sell? why or why not!

If he is looking to sell how soon ?

If he is looking to sell what number did he have in mind?

If he was looking to sell what would he do with the money?

Why did he decide not to go through and list the property a few years back?