House Hacking Financing

[Brian Bertschi]

I am new to BP and Real Estate in general. I am looking to buy my first investment property. I am looking at multi-family (2-4 units) and house hack it (owner occupied one unit). My market I am looking to do this is St Louis, MO. I’ve heard you can get financing as low as 5% down for a property doing this rather than traditional 20% down. I don’t want to eat up all my capital in case cap ex or some vacancy would happen. How long do you have to wait before I can rent out the unit I would be living in to increase cash flow? Is it a time limit like months or years, or is it a certain % of the paydown on the loan? Any help would be greatly appreciated.

[Jody Sperling]

I think you're mixing up two rules. You've heard that you have to occupy a home that you purchase with a personal loan at 5% down for one year so you can't rent it, and you're applying that to a multifamily or roommate situation with the same property.

The reality is, you can rent your property immediately as long as you occupy it. If you buy a triplex, you want to rent the two units you don't live in, and do it immediately.

As long as you have good credit, you'll be fine. Apply for a credit card to cover the capital expense emergencies (if you don't have one) and find the best property you can. There's no shame in buying turnkey. Especially when you're buying for a house hack. Best of luck!