Purchasing a multifamily home to House hack in Silicon Valley

[Gabriel Garcia]

Hello BiggerPockets! Been lurking for a few months, and finally got the guts to post!

I just graduated as a software engineer here in the Silicon Valley, and was fortunate enough to land a pretty good job. My salary is $125k/year before tax with total compensation of $180k (after bonus, RSUs, etc). This amount is expected to grow in a few years if I get a promotion! No debt.

I am getting sick of paying 2.5k for rent on a 1b1ba apartment and was looking it house hack to at least mitigate my living expenses.

A duplex runs for about 1M-1.5M, and a quadplex runs from 1.7M-2.2M (runs higher, but this is where I cap myself). I am planning on being an owner-occupant for the first year so that I have more flexibility on my financing options.

I would be a first time home buyer, so I want to leverage that as much as I can (use any loan programs, etc).

This is my math on a 1.7M quadplex (townhouse style) that is in the market. Each unit is 2b1ba. This would be with a 30 year fixed rate loan assuming I can come up with 300k (I can probably put down 200k) for down payment (maybe get another loan or crowdsource from family):

Monthly mortgage including taxes, interest, and home insurance: $7900/month

Per unit cost: $1972/month

Rent in the area for 2b1ba: 2.5k-3.2k (closer time 2.8k for a very similar model).

Possible cashflow @ 2.8k renting 3: ($2800 * 3 units) - $7900 mortgage = $500 POSITIVE

I don’t mind being in the negative a few months as I can afford it for the most part from the money I would be able so put away from my regular job. What do you guys think? I am mainly trying to mitigate my housing costs and not necessarily live rent free.