House Hacking multiple times?

Question

Hi! New to real estate investing. My partner and I are looking to house hack. We are wondering if we can use an FHA loan twice if the first house hack is put solely under my name and the second will be under hers. Thank you!

Raymond J. Rodrigues · Answer

@Abtahee Ali, if you’re looking to house hack in the Tampa Bay Area, I highly recommend reaching out to @Josh Green. He has an excellent team to help you navigate the real estate investment process successfully in your area.

Steven Foster Wilson · Answer

My wife and I are on our 5th house hack. It is a great way to get started. If you guys are married then you can only get one loan under FHA every 2 or 5 years. I would talk to a lender. On one of our house hacks though I found an even better loan by calling around to as many lenders as I could find. I always recommend doing that when you are starting out or even if you are experienced. The more you ask the more options will come your way.

Austen Mueller · Answer

Yes, Absolutley you can do this. You will just need to live in the first househack for 1yr and your good to move to the next one! best of luck to you.

Josh Green · Answer

Personally, I think the conventional loan route is much better.  With a 5% down conventional loan, you're able to get out of paying MI without an appraisal or refinance once you hit the 20% equity mark with just a broker's opinion of value (~$400).  FHA, you have to hold onto that for 11 yrs or refinance, which will cost a few thousand.  Next, this market is highly competitive.  Buyer demand is actually up 60% right now YoY and supply is down 20% according to NAR (and last year, Tampa was considered 2022's hottest market in the US).  The only real reason I see FHA being viable, is to be able to put down less on a multi-family property.  However, there are a few issues with that:

1) MFRs here are extremely low in inventory and thus the competition is fierce.  Any duplex that potentially makes sense with minimum down is going to need to be under $350k.  Duplexes priced this low I see go in typically 48 hours or less and often times cash or over asking price.  An FHA offer is just not going to come close to competing.

2) MFRs again are priced 9.9/10 times too high to make the numbers make sense + 9.9/10 times there are leases in place that make it non-financeable for an owner-occupant like yourself.

3) MFRs that do come close to break-even or slightly positive are typically in C class or worse areas.  For house-hackers, I've found this to be a major barrier for them as they simply won't put themselves into an ugly, somewhat distressed MFR in a ghetto neighborhood surrounded by other MFRs/renters.

Now, there are occasionally unicorns but in the past 12 months I've been looking I've seen fewer and fewer.  They also go super fast and expect to have a bidding war on them so make sure you're pre-qualified and have the best loan terms you can get.  @Ray (above) is a lender i've done a lot of deals with and he can close extremely fast.  Recently we beat out a cash offer for a house-hacker because we can close faster than they can.

I remember when I first moved here, my wife and I were so determined to continue rinse/repeating the house-hack method by buying MFRs.  We quickly realized how poor that market is here and pivoted.  In my opinion, there are 2 other house-hacking options that are more lucrative and less competitive.  One of those requires a little more cash on hand and the other does not, but both can utilize a minimum down conventional offering and work well.  In this market, you have to be more creative than ever to make a profit.  Real Estate margins will always trend toward decreasing margins as the herd mentality brings saturation to the old-school methods (FHA house-hack a MFR for example).  Luckily, this market has it's strengths still and I much rather be in a high growth, high appreciation market where deals are harder to find than a stagnant one with "good" cash flow percentages left and right.  Long-term investors know appreciation will make way more money for an investor than cashflow ever will and Tampa Bay is arguably top market for investors wanting appreciation over the next 10-15 years.

Jay Thomas · Answer

House hacking is an excellent means to enter the market or grow your investments, especially if you don't have any dependents. Personally, if given the opportunity to start anew, I would pursue this approach, as it offers numerous benefits.

Adrian Castillo · Answer

I 100% agree on house hacking, I'm consulting a family member about the process since my neph is going to college, Second year in now, and they have to find a rental off campus.

I convinced them to purchase a property under my neph name since he's been working for the past years, so now they can collect rent while my nephew collects rents from his roommates.

Kevin Coco-Senyszyn · Answer

Why sell it? Keep it as a rental and avoid the tax hit and closing costs altogether. Let your spouse use their FHA loan to purchase your second primary residence, then rent out the first. Eventually, you'll need to refinance or sell, but you can take a capital gains exclusion if you live in the property for 2 of the past 5 years.

Conner Olsen · Answer

You can only have one FHA loan out at a time. If you sell or refinance the property you can use an FHA again. I know many people that have done that but have never heard this 2 or 5 year rule before. Ask a lender!

Jeremy Kloter · Answer

House hacking is a great way to get into the game or expand if you don't have kids/wife lol! I would have done this if I had to start over again, but it's a great thing!

Edgar Sanabia · Answer

yes! The best part is you don't have to live in the house for a year. there are ways around that