House Hacking in South Florida?

Question

I've been playing with the idea of House Hacking in South Florida. Haven't really delved into the subject of house hacking too much. I wanted to know if other people in the area have done it, and if there are any major pitfalls that I should watch for when House Hacking?

Richard Burke · Answer

In the areas that I have browsed (delray to pompano), the Multi family homes in my budget are in sketchy neighborhoods.

Adam Schooley · Answer

It just takes time. I find them on the MLS or word of mouth. I would say that I see about 5 or 6 good deals on Multifamily properties a year. You just have to be ready to jump on them when they come.

Miguel "Mike" Perez · Answer

@Adam Schooley

Good catch.

I was quoting from my mortgage broker that told me 20% on single family and 25% on multis.

However, I forgot that is for investment properties, not owner-occupied ones.

I gotta say those rates are pretty generous for house-hacking opportunities.

Adam Schooley · Answer

@Cedric Dadaille

I'm doing exactly what you're talking about. I bought a duplex. I live in one side and rent out the other side. What Miguel wrote is pretty accurate except that you can do a conventional loan with 5% down. The only down falls are you live next door to your renters. If you have good ones it doesn't matter. The only other down fall I can think of is if you have a family it's hard to move them into a Multifamily as most are only two bedrooms and usually not in good school zones for the kids.

Miguel "Mike" Perez · Answer

Seems perfectly doable and after looking around in south FL I have gathered most people are already into it.

The simplest house hacking method is to buy a property with 2-4 units, live in one and rent the others.

Up to 4 units is still considered a non-commercial property.

This let's you put down 20% on conventional loans and 3.5% on FHA loans.

That's the golden ticket for house hacking.

Buy a 4 unit using 3.5% down, live in one (cheapest one), rent the other 3. It should be easy to cover mortgage and maybe even some cash flow.

Even 20% on a conventional should work with more of your money into the property.

The other type of house hacking you have to be more careful with is what I have seen done over and over again in south FL.

You buy a single family with a 3/2 config, then you divided it up into a 2/1 and a 1/1. Or a 2/1 and an efficiency.

Without proper permitting, it is illegal although many people do it.

Many people don't get caught, but when they get caught the fines and liens start coming from the municipality.

After trying some shortcuts (low cost fence project thankfully), I have learned that if it's worth doing, do it right and legally.  It will save you from headaches (losing time and money) in the future.

Account Closed · Answer

How have things been going with this? I am looking to do the same no later than next year and I'm in the same situation with having a child and a wife I need to make sure is in a good area. Which cities are you looking in, and what are you noticing in the market since you've been looking?

Account Closed · Answer

@Cedric Dadaille did you end up moving forward with this? If so, in which area did you choose to invest? Would love to hear how things went for you.

Evan Poole · Answer

I have been looking to do this myself. i actually went looking today. Keep me posted

Jamie Engledow · Answer

I have been looking to do the same, except as I have children and I have a criteria that the schools assigned to the house must have a 9 or 10 rating, and I also prefer at least 3 bedrooms and 2 baths each unit, so all the properties I have interest in do not meet any of the rules, 2% or 50%, but it is a price I would pay because nonetheless even after factoring all expenses I would be living cheaper than buying a single family in those same areas.  Also, since the neighborhoods are better the multis tend to be newer, nicer, and better maintained.  It does however, usually mean paying $500,000-over 1,000,000 for a Quad.. But as long as the greater purchase demands greater rent.....

Cedric Dadaille · Answer

Going to move forward, however the market is kind of high right now. I feel as if it's going to go through a correction very soon. I think I'll be able to get better prices then, will definitely update this post as soon as that happens.

House Hacking in South Florida?

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