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Updated about 4 years ago on . Most recent reply
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House Hacking vs SFH Investing - Chicago Suburbs
Hello all!
I have a few quick questions in terms of house hacking and your thoughts on where I should go with this route specifically the Chicago southwestern suburbs in today's extremely hot market. I graduated last May and work a full-time job as a commercial property tax consultant with about $20,000 in savings and counting. The past several months I have gotten several properties under contract in the Elmwood Park area and surrounding areas, but all have fallen through due to FHA financing (owner did not accept this financing route, buildings had too many repairs needed to pass FHA inspection) or the numbers simply did not work in the end. Do you suggest I keep saving to increase my reserves to find a better opportunity in an area similar to Elmwood Park / Wheaton (currently living at home with parents, but plan on moving out by end of March. I want to find a similar (B+ to B-) area). The price points for areas such as this one are well beyond my financing limit for the numbers to work out and cover my mortgage (mainly looking at duplexes) in today's market. On the other hand, do you suggest I start with single family home investing and renting a cheap apartment closer to my downtown office in the meantime? I do not plan on house hacking a single family home.
Thank you!
Most Popular Reply
@Christian Bernhagen
Hey Christian,
I had the same issue as you initially when I started out househacking. In addition to everything you’ve mentioned, I couldn’t find a property that I could get enough rents to cover the mortgage. So I had to be a little creative.
I was able to make the numbers work by finding multi-units with bonus rooms or sections that I could potentially rent out. And instead of renting by unit, I rent by rooms.
For example, I currently live in a duplex on the Northwest side of Chicago where I live on the 1st floor and rent by room on the 2nd floor (3 bedrooms). I charge $700 bucks a month per room so I get $2100 bucks total. If I had to rent the entire unit out, I could maybe get 1300-1400. I also rent the rooms in my basement (which has sort of an in law set up) on airbnb. Initially, I thought this would be a lot more work but I have great tenants who barely call me for anything.
Anyways, this is what I did. Hope this helps!