Guidance on House Hack on First Property

[Luis Jarquin]

Good evening BP,

I'm excited to launch my REI opportunity by soon purchasing my first property! I plan on House Hacking a single family home in the D.C., Maryland, Virginia (DMV) area.

I'm seeking guidance on whether this house-hack is something viable and if there were any resources you could point me towards?

Loans

I shopped around with several lenders and had a great experience with two in particular. Both of them were confirming the similar results for my particular situation. Despite this being my first property, a Conventional Loan would make more sense than an FHA. My monthly mortgage would be much less on a Conventional and I can pay off the property more quickly than with an FHA.

According to my lender, I qualify for a certain dollar amount BUT the advice I've heard elsewhere is to not pay monthly mortgage more than 25 - 30% of my take home monthly pay. When I run my own numbers, I think I should be seeking for a property for less than what I qualify for. But with a house-hack, perhaps the more expensive Single Family Home (SFH) can work.

Property

I plan on working with my realtor to locate a SFH with a walkout basement whereby I live in the basement and my tenants fill rent upstairs. If my property is in the more expensive range and in great shape, appealing to the eye and marketed well, I think I'd be able to attract high quality tenants that could cover the expensive monthly mortgage.

Questions/Feedback

What do you think about the my loan qualification discrepancy?

What would you think is the best approach:

• Rent upstairs to a family
• Rent upstairs with individuals

Appreciate your guidance and pointing me in the right direction, BP!  

I look forward to hearing from you.

[Russell Brazil]

Only 2 jurisdictions in the area allow for a seperate basement rental unit. Montgomery County and DC...and the properties need to fit very specific condition requirements for each, and the requirements are different in each. If you attempt to live in the basement and rent out upstairs on a property that does not qualify, there is a good chance you will get shut down at some point. 

PG, and NoVa do not allow it at all.