North of Dallas Texas House Hacking

[Daniel Mina]

Hey All,

I'm looking for the best way to find a small multi-family in the North of Dallas, TX area (Richardson, Garland, McKinney, Frisco, Princeton, Melissa, Allen, Plano, Murphy, Irving, Wylie, Sachse) to move my family into while house hacking. Ideally, I want to use an FHA loan and be able to add some value after rehab. My wife and I have decent capital and we could go for other financing, although our options are limited as we do not currently own a home to tap into. I've enlisted the help of an agent. Does anyone have advice on good strategies in this market to find small multifamily besides going through MLS listings with the help of an agent? Any input on what to look for when it comes to numbers would be helpful (I am still getting an idea of the different market ARVs, rent-value%, cap rates, etc., although small multifamily seems to be more challenging to comp than SF). Any advice/direction is appreciated.

[Bart H.]

Originally posted by @Daniel Mina:

Hey All,

I'm looking for the best way to find a small multi-family in the North of Dallas, TX area (Richardson, Garland, McKinney, Frisco, Princeton, Melissa, Allen, Plano, Murphy, Irving, Wylie, Sachse) to move my family into while house hacking. Ideally, I want to use an FHA loan and be able to add some value after rehab. My wife and I have decent capital and we could go for other financing, although our options are limited as we do not currently own a home to tap into. I've enlisted the help of an agent. Does anyone have advice on good strategies in this market to find small multifamily besides going through MLS listings with the help of an agent? Any input on what to look for when it comes to numbers would be helpful (I am still getting an idea of the different market ARVs, rent-value%, cap rates, etc., although small multifamily seems to be more challenging to comp than SF). Any advice/direction is appreciated.

 Daniel, do you have experience with rehab?  or with being a landlord?  If not, I might suggest taking a slightly different view on how to find properties.

In 2013 my wife and I decided to house hack a duplex (Live oak and Skillman).  We focused in on finding a place we would be willing to live in because it was good place to live, near things we wanted to do etc. 

We also viewed the duplex from the perspective of could we pay for it if it was a SFH. IE if we never rented it out, would we be ok living in one side of the house and paying the mortgage. With that perspective in mind, you are stepping into the rental business in small steps.

If you don't like being a landlord, or you end up having problems finding a tenant, you are still ok financially and living in a place you don't mind living in. 

Its a slightly different mindset from only going on pure numbers of cash flow, return etc.  I am not saying you should ignore the numbers entirely, but when you house hack, focus on your ability to live in the house and make the payments as you pick up the business of being a landlord.

Best of luck to you!!!  Let me know if I can answer any questions.