Any successful LI house hackers? also some general questions

[Michael Loffredo]

Hello everyone. I'm a 21 year old Long Island resident and have been my whole life. This is my first real forum post. Long story short I'm currently in the midst of a real estate project in PA which I will hopefully be finished with soon. Once it's finished I will have approx 80-100k (assume 80k) that I will be looking to invest elsewhere using the BRRRR strategy. My father is a contractor so I have a background in construction and he is willing to help me out with whatever project I get involved in. So I have a few different ideas that I'm toying with, one of them being house hacking on LI. I am still new to REI in general and would like to find an investment closer to where I live so I can have full involvement and learn as much as I can from the process, and the fact that my job is here on the island as well. I also may have some job opportunities coming up in NY that I don't want to have to pass because I'm no longer in state. I haven't done a tremendous amount of research but just from seeing what's out there and doing some quick number crunching it's looking to be a lot more difficult then I first anticipated. Between the home prices and the taxes I am having a difficult time finding homes that would be either break even or cash flow positive with me living in it, even a fixer upper. I wanted to house hack for a few reasons: one: I would have my own place to live expense free, two: to take advantage of the FHA loan, three: to live on premise and have first hand experience managing rentals. I am already living rent free so the first one is less important, but one of my goals is to become financially independent in the near future, that and I am not sure how much longer my parents will be on the island. I eventually would like to move off the island but for the next 2-3 years I will most likely be here. So anyways what I am trying to see is if anyone has been in my shoes before me looking for a house hack on long island? Also would it make more sense to not use the FHA loan a just look for a regular rental house since I am currently living rent free? Also if anyone has any investing experience on LI and has any advice it would be greatly appreciated. Thanks!

[Rich Becker]

Hi Mike, welcome! So I looked into house hacking on LI before and will eventually do it when I purchase my first residence in the fall (i currently pay a lot of rent :) ) I am not sure where on LI you intend on living but for a multi family duplex I don't think it's possible to live rent free without expenses, but surely a rent discount is possible. Especially with low money down, you're going to have a lot of debt service costs, not to mention the high taxes you'll have to cover and that's not even going into any other expense (repairs,capex vacancy, insurance, PM down the line ).

The way I am viewing it is that when I make the decision to leave that property in two-three years will it be cash flow positive? For instance, without living it the property, you estimate each side of a duplex market rents after rehab is $1.5k , so $3.0k total a month. If your total operating costs are say $2.5k a month, thus $500 positive cash flow you're sitting in a good spot IMO. So for the years you'll be living there, you'll just need to pay $1k on top of your $1.5k rent on one side to cover your total operating costs, thus a discount from $1.5k, and you'll be gaining equity during that time.

Side note-if you have 10%-I'd def consider Bethpage Federal Credit Union, they still do a 80/10/10 Mortgage/HELOC/Downpayment loan, which forgoes PMI, which is a total waste of money. DM me for any specifics on this.