House Hacking in San Diego

[Lionel Quiambao]

Hi everyone, I'm looking to do my first house hack in San Diego and would just like to network with those that did it before me!

I heard that it's hard to cash flow positively at first, so I'd like to know when y'all first started house hacking, what was your initial cash flow like, and how do you like your investment now?

[Jon Schwartz]

I'm a house hacker in LA, so I'm no good for local networking, but I have one piece of advice to chime in with:

Investing in Socal is waaaaaaay different than investing in the Midwest. The overwhelming majority of "common knowledge" and advice on Bigger Pockets is about investing in the Midwest -- ie, low- or medium-cost-of-living areas where cashflow trumps appreciation.

For example, Craig Curelop, who literally wrote the book on house hacking, is an agent in Denver who helps first-time buyers hack five-bedroom homes, With so many roommates, the property cashflow from day one -- while the owner occupies a room.

In Socal, with the cost of living so much higher, it's next to impossible to house hack and see cashflow while you're living in the property. However, that doesn't mean it isn't worth it!

Here's my case-in-point: a client of Craig Curelop might see $500/month cashflow when house hacking a five-bedroom house outside Denver. But what would it cost that person to rent that bedroom? Say, $600? So the delta is $1100/month (instead of paying $600/month to live with four roommates, he's earning $500/month to do it).

In Socal, even if your property isn't cashflowing, you can still achieve the same delta in your cost-of-living savings. For example, I have a client who bought a house with an ADU. His net month cost is about $500 to live in the AUD and rent out the house. Were he to rent an ADU like the one he lives in, it would cost him $2000/month. So his delta is $1500/month. He's actually making more (in savings) than Craig's client outside Denver!

And one other small point: income is taxed; savings isn't!

Good luck!