House Hacking here in NJ

[Manan Singh]

Hi all,

I'm relatively new to BiggerPockets and have been learning a lot! Right now I'm in a savings phase for what will likely be a year to year and a half. I recently graduated college and got a job in NYC and right now my current morning starts at 5:30 AM and my day ends at 7:45 PM, but I do get to save most of my income. I was wondering if anyone here has had experience house hacking as I don't want to live like this for more than two years. Preferably, I would like to be closer to the city. 

After browsing some old BiggerPockets forums it seems that there is some relative difficulty finding properties that cash flow along with House Hacking in NJ. Given this, I would be fine in breaking even or even losing a slight amount of money in a multifamily residential property deal. My goal is to simply lighten the commute to the city so I was looking at places like Rahway or Elizabeth where I see a multifamily houses up on places like Zillow or Realtor.com. I did see a person saying that they had success in Garfield NJ so I might check that out as well. Does anyone have any experience house hacking in these parts or perhaps in Norther NJ in general?

The hard part for me is that many of those properties can be 220-350k meaning that at minimum I'm probably looking at ~46k 20% down payment. After about a year and a half (or maybe two years) of saving, I should be able to save that much. Once I save it up, I'll probably take any deal where I can break even or lose slightly since I know that once I leave that property, I'll make a positive cash flow. I don't know if I want to get into an FHA loan as I would feel much safer paying off with the 20% down.

If anyone here does house hack, I would love to PM you some questions on your experience and how you went about finding a deal! Also if what I say above seems incorrect or too optimistic in assumptions, please let me know! 

Thanks!

[Marcus Lawson]

Hey man, I'm currently looking to house-hack in Rahway, Roselle, Linden, Elizabeth area too. I would 100% recommend an FHA loan. There's no point to paying more for a house when you don't have to. The goal of house-hacking is for the renters to pay the mortgage, so there's no reason to pay more.

You also must establish how much you are willing to lose per month on a multifamily. In this area you need a 3 or 4 family to come close to breaking even. It is also very competitive, so once you pick that number you're willing to lose per month, stick to it, and it will allow you to overbid on properties and beat out other investors.