House Hacking... In College?

[Blake Martin]

Hello and thank you for your time. I am planning to transfer to Cookeville TN to attend Tennessee Tech university for my last 2 years in college and felt this might be a great opportunity to get my first rental investment property by house hacking a multi-family property in the area. My specific questions are as follow:

1.) Should our current economic instability discourage me from jumping into an investment right now? Or, could this been seen as a great chance to buy property below market value? 

2.) For my first investment, should I find a real estate agent to help me work through all of my ignorance? 

3.) Is it less likely that I will qualify for an FHA loan right now?

4.) How can I find information about "rent by the room" regulations if they exist?

5..) Finally, how much above the down payment should I have in reserves for any unforeseen capital expenditures?

[Craig Curelop]

@Blake Martin - See my answers to your questions below:

1.) Should our current economic instability discourage me from jumping into an investment right now? Or, could this been seen as a great chance to buy property below market value? 

A: No. Quite frankly the market should never discourage you. If you make sure to buy cash flowing properties that you are confident you can rent out, it shouldn't be a problem. In your case, you will likely be renting out to college students. Make sure they either have stable jobs (unlikely) OR their parents can co-sign and have stable jobs. 

2.) For my first investment, should I find a real estate agent to help me work through all of my ignorance? 

A: 100% yes. Find an agent that knows a thing or two about investing and/or house hacking in the area you are looking. A good one is invaluable. 

3.) Is it less likely that I will qualify for an FHA loan right now? 

A: If you have a good paying job (or your cosigner does) AND you have enough in reserves after your down payment to meet at least two or three months of the mortgage, you should be good. However, things are changing so quickly right now.... anything can happen.  

4.) How can I find information about "rent by the room" regulations if they exist? 

A: I would just google "maximum occupancy" in your area or something along those lines. It should tell you how many people are allowed to live in a single dwelling. 

5..) Finally, how much above the down payment should I have in reserves for any unforeseen capital expenditures? As much as possible ....... and then some. Some people never need a reserve. Right now multi unit property owners are worried that they will never have enough. 

A: This is really up to you and your risk profile. Personally, I like to have about $10,000 in reserves for each property.