House-Hacking in Orange County! Anyone doing it?

Question

Hey everyone,

I'm currently living in Orange County, CA (Fullerton more specifically) and, due to general CA market, it has always felt like out-of-state investing is the way to go. However, recently I've been wondering if house-hacking is an option in my area.

Is anyone out there successfully house-hacking in Orange County? What are some factors that I need to take into consideration? Some of the deals I've analyzed lead me to believe that the numbers just don't work in my area (only way I'd be able to get into a home in CA is with an FHA) Any thoughts?

In addition, I'm feeling more inclined to house-hack before going out-of-state for my first property to get some hands on experience with the property management. Maybe some thoughts on that too?

Thanks!

Jason White · Answer

@Stephen Tanquary

I don’t have any OC house hacking experience, but with the new ADU laws there are a lot more options for the house hacking strategy. If you can get the right house in the right area and then convert the garage or build a new unit in the back yard, you could get around $2000/m from the back unit or $2500/m from the front and live in the new back unit. Not sure where in Fullerton you are but the neighborhood that spans from FULLERTON college all the way to cal state FULLERTON is a great option for this. I have two acquaintances that are doing that in the area. I’m a contractor in the area, so if you need any help in that arena I’m here for you.

Account Closed · Answer

Hi Brian, with the new ADU bills (in this case AB 670) HOAs will no longer be able to prohibit ADUs but they CAN establish guidelines such as minimum/maximum unit size.

Ali Boone · Answer

Here's some things to think about with househacking in general, but especially for the OC...pay extra attention to the section about the numbers.

https://www.biggerpockets.com/...

Hope that helps!

Stephen Tanquary · Answer

@Peter Mai

Sorry for the delay! We're only recently starting to make some progress. We just get pre-approved and are working with an agent in the area to look at some available properties. I don't think we currently have the finances to get into any of the duplexs/MFHs in the area, so I think we are leaning towards a SFH with the potential to build an additional unit. As far as the numbers go, it doesn't look like we'll be able to pull off a "true house-hack" but as newbies, we just feel a little more comfortable getting the experience of buying a home that we can live in ourselves first, before we move into the OOS market.

How have things been going for you? Have you pulled the trigger on that garage conversion/ADU you were discussing?

Jason White · Answer

@Peter Mai

I can help with that, but I would need more info or the numbers would be more of a guess then anything. If all you want is general numbers, I should be able to give you general numbers. Let me look over some stuff when I get back into the office next week and I’ll get back to you here.

Peter Mai · Answer

@Stephen Tanquary

Any updates on your project?  Would love to hear more about your experience and what you've discovered.  Thanks!

Peter Mai · Answer

@Jason White

as a contractor near the OC area, are you able to provide a detail of costs for a garage conversion and/or adding a new ADU unit?  Thank you

Brian Ashbaugh · Answer

I’m Starting to research adding an ADU in Mission Viejo. sadly the HOA seems to limit the size to 652 sq ft. I’d like at least 800-1000 sq. ft.

Still trying to figure out loan options for ADU’s, costs of building, costs of hooking up utilities, etc.

HOA might be my biggest challenge to getting approval. I’m wondering if state law takes precedence over HOA rules?

Rob Massopust · Answer

One thing is if the ADU or guest unit is already existing then the income can help you qualify.

There are great owner occupied loans [3.5-5% Down FHA and Fannie Mae] that buy and rehab and can build adu

Stephen Tanquary · Answer

@Rob Massopust

Ya it seems, at the moment, like ADUs are encouraged and incentivized! Hoping it will last long enough for me to get in the game.

Main challenge for me is just getting started. Only been listening to the podcast for about a year, but I've been trying to save up enough to get started. Initially thought my only option would be going out of state. More recently I've been thinking that if I found the right property I could get in with an FHA loan and house hack for a few years to get some of that hands on experience with property management, building additional units, etc. "Sweat Equity" as David Greene would say!

Thanks for the response!

House-Hacking in Orange County! Anyone doing it?

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