1st attempt at house hacking

[Nick Brown]

Happy New year everyone! I'm from the Westchester area in NY. A friend mentioned to me about house hacking to get into ownership rather than renting. I don't have much put away but have great credit in the high 700s. Not gunna lie...I'm a bit nervous about home ownership as well as being a landlord and preparing for Unforeseen expenses but I know I need to pull the trigger to get my business started. Just looking for any advice or words of wisdom to move forward with. Where there is a will there is a way and I know I'll get something done just trying to make sure I'm going about it the best way possible for my situation. Thanks in advance for the help.

-NB

[Lee G.]

Save your nickels and then buy something. Buying and owning is always more expensive than you think. The last thing you want is to have a major repair -- water heater, furnace, bed bugs, roof etc and not have the cash to deal with it. 

Do your analysis but don't let it paralyze you. I'm happy to get you a couple year one spreadsheets to help you analyze small multifamily units. 

Define your investment criteria. The first building I bought was a 4 plex. I lived in one unit and rented the rest. I'd recommend a 4plex to house hack with so you can leverage your FHA buying capacity. I also bought it making sure it cash flowed with me living in one of the units ($0 rent). Don't forget when you underwrite a deal to include maintenance and CAPEX. Don't skimp on these just because you want a deal.

Finally, set a hard deadline where you will have saved enough money for reserves, a reasonable down payment and when you'll start writing offers. 

Good luck.