Feasibility of this “house hacking” alternative??

[Gunnar Haugen]

Hi all, 

I was hoping folks with some experience might be able to give me a bit of advice. I’m roughly familiar with the idea of housing hacking from this site and the BP podcast. I generally see or hear it described in terms of purchasing a duplex or apartment building and then occupying one of the units for a certain period. Although that seems like a great idea, I’m at a stage in life where moving my family back into a duplex or apartment for a temporary period as an investment strategy is likely a non-starter.

That said, we recently moved and will be in the market for a home relatively soon, which got me thinking about whether the following alternative might be feasible: We’d purchase a lot and then divide the lot in two. We’d construct two separate homes, one on each of the two divided lots. We’d then rent out one of the homes and live in the other as a permanent residence, attempting to recreate the house hacking strategy but with my family ending up in its own house that we would plan to stay in indefinitely.

At minimum, this would seem to clearly increase the complexity of the strategy because now I’m effectively developing the land in addition to everything else. That seems a bit imposing for someone who lacks experience as a real estate investor generally (my experience is limited to one rental unit that I more or less backed into when I decided to rent my former residence). On the other hand, I imagine that I could learn a lot quickly by going through this process and that could be useful in future endeavors.

Any thoughts on whether this would be a workable idea or whether it would be too much to take on? Also, any thoughts on how a bank might view financing this type of project would be appreciated.

Thank you!