Baby steps towards a house hack

[Grant P.]

Hello, I'm a new hopeful investor and a recent college graduate. I'm looking to start a house hack in Northern Virginia and commute in to DC, right now I take the train so I can be very flexible with where I live thanks to busing, trains, and the metro.

I'm in the process of saving for a down payment and as of right now I have cash reserves to cover a $250,000 3.5% down payment. From the communities I'm looking at the homes are selling in thr $300k range and just in to $400k. I'm looking for guidance, advice, and additional resources on the next steps to starting my first house hack. I'm working my way through Curelop's book, which is how I found this community. The biggest concern on my mind is the process of finding tenants. I understand that this is far down the line of something I'll need to take care of, but a big fear of mine is drowning in a mortgage while failing to find tenants.

A few general questions I have are:

1. Let's say I reach my goal down payment, now what?

2. What can I be doing besides browsing redfin as I save up for a down payment?

A local related question I have is:

1. I understand that Virginia has laws against unrelated tenants leasing under the same roof. Does this mean that my house hack is capped at 4 bedrooms (for four unrelated tenants)?

Thanks for taking the time to read this.

[Adrienne Green]

Hi Grant! It sounds like you're doing everything right. Here are my responses to your questions, based on my experience:

1. Another alternative plan would be to buy a smaller place just for you, live there for a year, then move on and rent it. I had a client buy a $175k 1bd/1ba condo near Mosaic District. He'll save up for a year or so, move on, and rent out this place with the benefit of having it on a primary resident mortgage loan. Pros: not having to live with others, buy with what you have now. Cons: you may prefer living in something bigger.

2. BEFORE you reach your goal down payment, create a relationship with a Lender and Realtor.

The lender can take a look at your financial situation, and  recommend actions that can boost your credit (if needed). You need a minimum credit score to qualify for a FTH 3.5% down loan, if you're not there yet, working with a lender early can help you get there.

A Realtor can create a custom search for you in MLS that is so much better than you browsing Redfin. You can get emails with promising listings customized to a search created just for you. I recently recorded a YouTube video about this- I'll PM you a link.

3. Legally, yes you would be capped at 4 unrelated tenants. I'd note that if capital appreciation is a goal for you, historically in NOVA lowered priced (and smaller properties) such as condos and townhouses will appreciate at a faster rate. So this cap may be irrelevant for you.