Beginner House Hacker Questions

[Mohammed Nasser]

Hi BP Community!

I have decided to enter the field of RE investing and I am still extremely new to it (less than a month). I live in an expensive area (San Jose, CA) so the way I would like to begin my investing career is through house hacking. I know that since the Bay Area in general is so expensive, its unlikely that I would find a cash flowing property, but I believe it may be possible for me to make a good deal where I could at least live at a discount rate compared to what I would otherwise be paying in rent. I currently work a W-2 job with a decent income but I am cash poor and saving up for a deposit (planning for a FHA loan), and also have some student loans that need to be paid off (DTI currently is about 42%). I am not panning to quitting my W-2 job anytime soon but as I start to invest in RE and find house-hack deals, I have a few questions for the BP community to help me get started:

1) What are some tools I could use to find a good market near the bay area to house hack in? And are there any preferred tools (free or not free) to analyze house hack deals to see which deal would be a good one? I have been looking online and found tons of websites and videos and it could get overwhelming and so I wanted to see if there are preferred tools used in BP community?

2) Although I do not have cash saved up for a down payment at the moment, would now be still too early to look for real estate agents that have expertise in finding house hacking deals? I don't want the agents to feel like I am wasting their time if I still do not have down payment cash. is there anyone within the community willing to connect me with an agent they like?

Thank you all for your help! While I am still new to the world of RE investing, I know that the BP community will always be my side and I am excited to begin this journey of my life with you all!

[Brandon Rush]

Hey Mohammed,

It's great that you are considering house hacking as I believe it is one of the secret wealth builders that many investors never take advantage of. In terms of tools you can use to analyze house hack deals, you can simply use the Bigger Pockets rental property calculator. You would input your expenses on the property you are looking at and input income you can get from renting out rooms or other apartments. The calculator will most likely display a negative balance, but that is simply the amount you will be paying out of pocket monthly. With that said, don't drive yourself crazy if you see a negative cash on cash return for a house hack. 

On method you may wan to consider for finding more affordable areas is going to local investor meetups in your area. By stepping into those meetings and saying "My name is Mohammed, I am looking to get into my first house hack in the next year and hoping someone could give me some insight on more affordable areas to house hack in or tactics for house hacking in an expensive market", you are bound to gather the information you are looking for. 

In terms of working with agents, yes, it may be a bit too early if you do not have a pre-approval or the funds for a down payment. Very few agents will take you on for "free". Again, maybe find one at a local meetup, build a relationship, and they may be willing to help you out. Being an agent myself, if I built a relationship with someone in your place, I would definitely take them to a few showings knowing that you were not ready to purchase at that time. 

I hope that information was helpful to you and keep going in the direction you are. 

Good luck and reach out if you have any questions.