Newbie Question!!!

[Ryan Morgan]

what does house hacking consist of????

[Mike Makkar]

@Ryan Morgan, you're absolutely right. House hacking gets a little difficult for mid-aged professional types like us. 

For eg. purposes, lets say we live in a 300k home where as my investment strategy is catered around 100k homes. However, my wife wouldn't allow me to house hack into a 100k home. I've considered buying an in-between 200k home that I could house-hack as either a temporary home (in case we need to move etc.) or use as a rental. However, even a 200k home doesn't make sense for a rental. I would rather buy two 100k homes and use the excess return to rent instead. How I wish to relive my 20's, I would have just house-hacked through all the 4 homes where I lived.

Given this scenario, house-hacking may work better with flips. If your family is willing to put up with the remodeling and construction then it might work.

Another idea is to use idea from @Russell Naylor and house hack into a duplex or 4-plex. By being an owner occupant you'll qualify for a FHA loan and require only 3% down. Working some crude numbers, you could buy a Class-A, higher-end 4-plex for 600k to 800k (I'm using numbers from a higher-end dallas zip code) and charge 2000 per month in rent for the 3 other units. This will cover your units rent and more. Again, if you did your numbers right, you'd cash flow even before you move in.