House Hacking First Investment

[Francisco Gomez]

Hello, BiggerPockets!

I'm Francisco from Las Vegas,NV. I'm a 21 Year old real estate agent who is interested in investing and thought it would be good for me to begin with a multi family home and house hacking. Although i'm not able to get FHA financing yet due to bad credit, i will be working on fixing that and saving up money for a down payment. I'm interested in getting something by UNLV and maybe focus on student rentals because i feel it would be easier to work with tenants in my age group. The multi family market in Las Vegas isn't that great so if I'm unable to find a good deal in that area im also willing to look in any areas close to the freeways. I don't mind living in these "war zones" but I've heard a lot of investors tell horror stories of trouble tenants but i'm wondering if tenants behave better when the owner resides in the same property? Anyway, im curious to hear any advice, stories, or tips when it comes to MultiFamily or House-Hacking. Book recommendations welcomed.

[Robert Rayford]

@Francisco Gomez, It's great you want to use Real Estate Investing as a way to reach financial freedom. House hacking is a good way to enter but it's a tough game without property management experience. Starting with a duplex would be ideal. A 4-plex in Vegas for a entry investor will be trying do to the fact that your purchase would be in the hood. I have managed property of my own and for other investors for 20 years in Vegas and the Bay Area, Ca. I myself would think twice about living with my tenants in D neighborhoods. While living in a complex for 14yrs as a manager I would find it hard to sleep because of the fear that the tenant I just evicted decides they want to vandalize my car and such, the late night drunk lock outs beating on your door asking for to be let in their unit, the tenants dragging you into their personal life issues and then using that as a reason for the late rent and on and on. This is not to discourage you, I am telling you this because I would want you to succeed and not to be turned away from investing do to this type of experience. 

A investor friend of mine used a FHA loan to start his house hacking venture. The rules say that you have to live at the property for this type of loan, which means you can't rent it out. What he did was to make the apartment a home office and visited daily but mostly stayed at another place. He adjusted the rents to pay 50% of his rent and he wrote off the home office on taxes. House hacking is a minimal 2 year venture, do the math against the 5 year cycle in real estate and make a well thought out plan, including a reputable Qualified Intermediary .

BTW: I think tenants acts pretty much the same with the owner there or not. With the owner there tenants have the ability to have a duel persona until there's a issue !

As far as my friend, he now lives in Miami in a multi-mil condo overlooking his 50ft yacht. Still hacking!