Torn b/w 2nd house hack or begin BRRRRing

[Zachariah Hays]

Looking for some insight from the community.

I live in Cleveland, OH. I’m 28 and have 5k in debt to my name. I currently live in a successful house hack (duplex) that I only pay for utilities each month (~$350) out of pocket.

My full year is up and I am torn between doing another house hack or begin a BRRRR project.

I have never BRRRR'd but it has been all I've been listening to or reading about during the pandemic. I love that it is scaleable. I would have to use a hard money lender for the first time as I do not have the capital to fund the entire project or equity to utilize in my current home.

Or I could take the simple way out and utilize another low owner occupancy down payment option and find another duplex/tri/or quad in my area. While I know this method works, it’s boring and not as scaleable and involves constantly moving. Why move to another small multi when my mortgage is already paid for here?

I enjoy my house hack now and have grown fond of my home. This pushes me towards BRRRRing as I don’t have to move and can capitalize on the fact I don’t have a mortgage to pay for as my tenants do for me.

Any insight would be greatly appreciated.

[Samire Radman]

Why not do both? If you could move into a small multi that is livable you can live in one unit while you fix the other units up first before moving to the other one. Once all units are fixed up you can then refinance getting that cash out (a live in BRRRR).

I would try that route before using hard money because the money you get has an owner/occupant is so much cheaper. Plus, if you live in any of these properties for 2 out of the past 5 years you don’t pay capital gains tax. 

Then when you have enough capital saved up starting using the BRRRR me god to invest in other properties as well while you continue to house hack. It may be annoying to move around but you can make a lot more money that way.