House hacking in New York

[Brad Haughton]

So I'm watching a video on YouTube right now about house hacking but I think that I said in this video every time you house hack is like a substantial upgrade not a downgrade is that true when it comes to house hacking or is it like a 1031 exchange where you have to buy a house that's better than the previous house kind of like that I'm thinking of doing house hacking in New York up to maybe 10 multifamily units and then start branching off to something else like obtaining Apartments and maybe consider developing my own house I don't know just thinking idea in my head but ultimately I like the idea of doing house hacking. Any knowledge or Insight information you can provide will be greatly welcome regarding how house hacking work and I'm definitely thinking of going with the FHA loan for the house hacking idea for the multi-family side of housing.

[Dave Foster]

@Brad Haughton, Claro - They're wrong.  Once every two years you can sell the house you live in (as long as you have lived in it for 2 out of the 5 years prior to sale) and take the first $250K of profit ($500K if married) tax free.  There are no reinvestment requirements You simply buy another primary if you want.

If by "house hack" you mean renting out rooms that are part of the regular living area then it all falls under the sec 121 primary residence.  If you're renting out a lower unit, or adu, or the other half of a duplex you live in then you have probably separated that out on your tax return so you can get the tax treatment of expenses and depreciation against income.  That's when you would do both a 1031 and 121 operation.