House Hacking in Los Angeles County

[Angela Arriaga]

Hello fellow real estate investors,

Our journey began with the desire to secure property for my fiancé and me, marking the next steps in our future. As low-income owners with a keen entrepreneurial spirit, we balance W2 jobs with side hustles, such as selling custom t-shirts or baked goods. Discovering the concept of house hacking ignited a passion within me, prompting deep dives into podcasts and books on the subject.

Currently in the NACA process since June 2023, I anticipate viewing properties by March. My focus lies on purchasing a multifamily unit in Los Angeles County. Despite diligently analyzing Zillow and MLS properties, viable options seem limited. While aiming for profitability and cash flow may seem ambitious to some, it remains my primary objective.

I welcome any tips, opinions, and insights from experienced investors.

Warm regards, Angela Arriaga.

[Rick Albert]

Hello Angela,

Welcome to the BP community! I'm a 2x house hacking investor here in Los Angeles and have worked with many house hacking clients.

1. Your goal is to cash flow positive? If so, unfortunately right now in this market that isn't possible. Here is what I tell everyone: If the property cash flows at 3.5% down, why wouldn't an investor putting 20% down buy it? I'm not being negative, I'm being realistic. Appreciation plays a big part in this. 

2. There are four ways to make money in real estate: 1. Cash Flow 2. Appreciation 3. Loan Buy Down 4. Tax Benefits. Even though it doesn't cash flow today, are you factoring in the other three?

3. Get creative. On our second house hack, after building the ADU, my wife and I moved into the studio ADU and rented out the main house. We refinanced twice before moving into the main house. We probably could cash flow if we rented rooms and after raising rents on our ADU tenants, but choosing not to.

4. From The House Hacking Strategy, published by BP (and I'm a case study in the book), Craig talks about the profitability to comfortability scale. The more uncomfortable you are, the more potential cash flow. This is important as you understand where you want to be. I have a client who is renting each bedroom and the ADU. I have another client where his family live in one unit and rents out the other on a month to month basis.