New investor assessing the local house hacking market

New to Real Estate · KY · Member since 2021 · 5 posts · 1 vote

Hi everyone. I've recently been learning about real estate investing and house hacking, but I want to figure out how viable this strategy is in my area.

I'm 23 years old, living with my parents in a small town in Kentucky (~30k population). I don't plan to live here forever, but I don't have a connection to anywhere else that would prompt me to move. I would love to move out to start building wealth and gaining experience in the space, but I don't know the demand/opportunity for multi-family house hacking in my local area.

How would I analyze my local real estate market to determine if my target strategy will work for me? Any advice is welcome. Thanks.

1 Reply

16 views

Most Popular Reply

Benjamin AakerPro Member

Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes

Hi Skye,
Congratulations on entering the investment game! There are thousands of people on this site who would love to have started at 23. The local market won't dictate whether your strategy will work for you.

You first should determine how much cash you have for a down payment. Since you'll house hack, you should be able to get a place with 3.5% down on an FHA loan. Take your down payment and divide by 0.035 and you'll have your maximum price. Use that to decide whether to go 1 to 4 units. Bigger has more economy of scale and I always recommend a 4 plex for house hacking if you have the funds.
Determine what # units by looking on zillow and finding prices in your area. This will very roughly give you an idea. If you have the money saved to meet the down payment then the strategy has a good probability of working.
Next, you'll need to determine market rent for your area. A real estate agent in the multifamily space will be able to tell you. Learn how to evaluate properties. I recommend reading The Millionaire Real Estate Investor by Gary Keller.
Find a property that works and pull the trigger. Of course, this tiny post won't tell you everything but I hope it gives you a framework.

2 Reply

See this reply in the discussion

11 Replies

Jump to latestLatest

Sort by

Benjamin AakerPro Member
Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
3y
Hi Skye,
Congratulations on entering the investment game! There are thousands of people on this site who would love to have started at 23. The local market won't dictate whether your strategy will work for you.

You first should determine how much cash you have for a down payment. Since you'll house hack, you should be able to get a place with 3.5% down on an FHA loan. Take your down payment and divide by 0.035 and you'll have your maximum price. Use that to decide whether to go 1 to 4 units. Bigger has more economy of scale and I always recommend a 4 plex for house hacking if you have the funds.
Determine what # units by looking on zillow and finding prices in your area. This will very roughly give you an idea. If you have the money saved to meet the down payment then the strategy has a good probability of working.
Next, you'll need to determine market rent for your area. A real estate agent in the multifamily space will be able to tell you. Learn how to evaluate properties. I recommend reading The Millionaire Real Estate Investor by Gary Keller.
Find a property that works and pull the trigger. Of course, this tiny post won't tell you everything but I hope it gives you a framework.
2 Reply
Skye Brown
OP
New to Real Estate · KY · Member since 2021 · 5 posts · 1 vote
3y
Quote from @Benjamin Aaker:
Hi Skye,
Congratulations on entering the investment game! There are thousands of people on this site who would love to have started at 23. The local market won't dictate whether your strategy will work for you.

You first should determine how much cash you have for a down payment. Since you'll house hack, you should be able to get a place with 3.5% down on an FHA loan. Take your down payment and divide by 0.035 and you'll have your maximum price. Use that to decide whether to go 1 to 4 units. Bigger has more economy of scale and I always recommend a 4 plex for house hacking if you have the funds.
Determine what # units by looking on zillow and finding prices in your area. This will very roughly give you an idea. If you have the money saved to meet the down payment then the strategy has a good probability of working.
Next, you'll need to determine market rent for your area. A real estate agent in the multifamily space will be able to tell you. Learn how to evaluate properties. I recommend reading The Millionaire Real Estate Investor by Gary Keller.
Find a property that works and pull the trigger. Of course, this tiny post won't tell you everything but I hope it gives you a framework.

Hi Benjamin! Thanks for the great advice! I'm just worried that my options will be limited in the small town where I live. I've looked on Zillow and Trulia for multi-family properties in my city, and there are limited options. So I'm wondering if I should be patient or look into other areas.
0 Reply
Derek BrickleyBusiness Member
Lender · Ann Arbor, MI · Member since 2021 · 665 posts · 227 votes
3y
Hi Skye!

I’m in a very similar position! I’m 22 now and looking to househack in Michigan but also live in a small town currently. Resources I have found include:
https://datausa.io/
neighborhoodscout.com
Crimegrade.org
Niche.com
Unitedstateszipcodes.org
Brandon Turner has recommended in the past:
Worldpopulationreview.com
cityprotect.com
Greatschools.org
Bestplaces.net

[email protected]734-645-7722
Gold Star Mortgage Financial Group548 Reviews
Website View Page
1 Reply
Skye Brown
OP
New to Real Estate · KY · Member since 2021 · 5 posts · 1 vote
3y
Quote from @Derek Brickley:

Hi Skye!

I’m in a very similar position! I’m 22 now and looking to househack in Michigan but also live in a small town currently. Resources I have found include:
https://datausa.io/
neighborhoodscout.com
Crimegrade.org
Niche.com
Unitedstateszipcodes.org
Brandon Turner has recommended in the past:
Worldpopulationreview.com
cityprotect.com
Greatschools.org
Bestplaces.net

Great! Thanks for the resources!
0 Reply
Mitchell Wildman
Homeowner · Ogden Utah · Member since 2022 · 9 posts · 4 votes
3y
Hey skye i was faced with a similar obstacle when living in Indiana there wasnt much in the mutli family space. I over came this by buying a single family house and renting out extra bedrooms and also did a live and flip with that property. If you are set on buying a multi family property and want your own space you might have to look a little further out then your home town if you want to stay in Kentucky I would recommend bowling green the area is really growing and has a growing college in town as well hope this helps and good luck!
2 Reply
Tyler LingleBusiness Member
Real Estate Consultant · Indianapolis, IN · Member since 2021 · 440 posts · 292 votes
3y
If I were in your shoes I would immediately network with agents and find one that understands investments. However, this town may be too small to have much of an investment / investor presence. So then, I would look in the largest town nearby. I repeat: Network. All doors open up in RE, based on people. The people component is how you learn absolutely everything. I would find anyone in Kentucky and drive to meet them. Always get 2-3 good contacts to set up coffee meetings from after every meeting. The learning is where all the ROI is in the long run...
[email protected]
Roots Realty Co. 562 Reviews
Website View Page
2 Reply
Skye Brown
OP
New to Real Estate · KY · Member since 2021 · 5 posts · 1 vote
3y
Quote from @Mitchell Wildman:

Hey skye i was faced with a similar obstacle when living in Indiana there wasnt much in the mutli family space. I over came this by buying a single family house and renting out extra bedrooms and also did a live and flip with that property. If you are set on buying a multi family property and want your own space you might have to look a little further out then your home town if you want to stay in Kentucky I would recommend bowling green the area is really growing and has a growing college in town as well hope this helps and good luck!

I figured as much. Thanks for the response and advice!
0 Reply
Skye Brown
OP
New to Real Estate · KY · Member since 2021 · 5 posts · 1 vote
3y
Quote from @Tyler Lingle:

If I were in your shoes I would immediately network with agents and find one that understands investments. However, this town may be too small to have much of an investment / investor presence. So then, I would look in the largest town nearby. I repeat: Network. All doors open up in RE, based on people. The people component is how you learn absolutely everything. I would find anyone in Kentucky and drive to meet them. Always get 2-3 good contacts to set up coffee meetings from after every meeting. The learning is where all the ROI is in the long run...
Understandable. I'm still really early in the learning process, but I definitely plan on trying to network and meet others in the RE space to expedite this process. Thanks!
0 Reply
James WilcoxBusiness Member
Real Estate Agent · Bowling Green KY ~ Lexington, KY · Member since 2015 · 1k+ posts · 602 votes
3y
Quote from @Skye Brown:

Quote from @Tyler Lingle:

If I were in your shoes I would immediately network with agents and find one that understands investments. However, this town may be too small to have much of an investment / investor presence. So then, I would look in the largest town nearby. I repeat: Network. All doors open up in RE, based on people. The people component is how you learn absolutely everything. I would find anyone in Kentucky and drive to meet them. Always get 2-3 good contacts to set up coffee meetings from after every meeting. The learning is where all the ROI is in the long run...
Understandable. I'm still really early in the learning process, but I definitely plan on trying to network and meet others in the RE space to expedite this process. Thanks!

@Skye Brown hey I can help with this. Depending on where you are the state we maybe close. Got an event coming up you should attend. HMU.

REI James w/ eXp Realty54 Reviews
Website View Page
1 Reply
Jack Mawer
Lender · Member since 2022 · 338 posts · 374 votes
3y
I would recommend looking up local real estate meet ups in your area and attending as many as you can - this will be a great way to network with lots of players in the industry including real estate agents, investors, wholesalers, lenders, etc
1 Reply
Kevin Hart
Real Estate Agent · Louisville, KY · Member since 2014 · 257 posts · 172 votes
3y
Hi @Skye Brown I am an investor and realtor in Louisville. I'm not sure where in KY you are but I'd be happy to chat and see how I can help or at least point you in the right direction.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.