What is house hacking?

[Hansel Gunawan]

It might sound stupid, but I'm beginner here.

What exactly is house hacking? what makes it better than other strategies?

Thanks!

[Nolan Chandler]

Hey, @Hansel Gunawan! 

So, in sum, house hacking can be when you are able leverage low down payments in order to control an asset (use an FHA loan and rent out the other rooms/units, use the VA loan with no down payment to ultimately turn the property into a rental property, etc.). This strategy acts as a low barrier to entry to allow someone with little capital to enter the investing world, to build equity, and repeat the process to continue to build their portfolio/wealth.

I would be happy to go into more detail should you ever want.

_____________
REALTOR® CalDRE: 02221003 | CA Bar: 322013

[Hansel Gunawan]

Hey @Nolan Chandler

Thanks for replying to my post.

Yes, I'd like to go more detail about house hacking with you.

I think I'm having a hard time in analyzing which deals are good enough to buy. Also, how to know if the area that I'm interested in is good? What indicators that I should check?

Thanks!

[Devin Peterson]

Hi Hansel!

House hacking is essentially the cheat code to get started into real estate investing.

Generally done by utilizing FHA loans and 2-4 unit properties.

Basically, buy a primary residence, live in it or one of the units for 12 months, move out buy again and do it all over again.

Each time you can utilize fha as long as you refi the former before you use it again.

Great way to buy a lot of properties with low entry cost!

[Nolan Chandler]

@Hansel Gunawan BiggerPockets has many articles to help give broad analyses on various markets.  Really the super zoomed out view should be where there is strong job growth, population growth, and a good price-to-rent ratio.  Of course there are more variables and it gets more detailed than this, but this is merely a starting point to narrow down markets that you really want to invest for research in.  Once you do that, I would get referrals to good brokers/property managers in the area to get their expert opinions from their numerous years in the area.

________________
REALTOR® CalDRE: 02221003 | CA Bar: 322013

[Hansel Gunawan]

Hey @Devin Peterson ,

What do you mean by primary residence? is that a multi-family property?

Sorry for my newbie question.

I really want to understand the business :)

[Brandon P.]

Quote from @Hansel Gunawan:

Hey @Devin Peterson ,

What do you mean by primary residence? is that a multi-family property?

Sorry for my newbie question.

I really want to understand the business :)

Primary residence - the place where you live and reside for the majority of the year; your legal address.

Multi-family - is a property that has multiple units on it. Most commonly duplex, triplex or quadplex.

A primary residence can be utilized on a multi-family property. For example you buy a triplex and live in one of the three units. This is both your primary residence and a multi-family property.

A single family residence - aka a single house - can be a primary residence but cannot be considered a multi-family property. (although you can house hack and rent out rooms in and SFR.)

[Hamp Lee III]

As my dad said, “no question is a stupid question if you don’t know the answer.” Thanks for sharing your question here.

One of the best things you can do right now is continue to educate yourself. And you've joined one of the best communities for all things real estate investing.

1️⃣ Download this ultimate beginner’s guide: https://assets2.biggerpockets.com/uploads/user_file/file_object/1694/UBG_2018.pdf

2️⃣ Read BP beginner books on investing: https://store.biggerpockets.co...

Also, read Rich Dad, Poor Dad by Robert Kiyosaki and Think and Grow Rich by Napoleon Hill

3️⃣ Subscribe to BP podcasts or YouTube channel and watch their webinars.

4️⃣ Keep asking questions here on the forums.

5️⃣ Visit (join) a local (and legit) real estate investment association.

6️⃣ Consider joining a BP bootcamp: https://www.biggerpockets.com/blog/real-estate-investing-bootcamps

I wish you all the best in your investing journey!

[Ryan Thomson]

@Hansel Gunawan great question! You should take pride in being courageous enough to ask! 

House Hacking is amazing. Here are some resources I found really helpful on my journey:

1. For podcasts I really like the House Hacking episodes on Bigger Pockets Podcast and other channels. Here is a playlist with the best House Hacking Podcasts I’ve found: https://open.spotify.com/playlist/4A6uLsPfdWEMmJhG4TSjyb?si=743bb403548f47fb

2. Great beginners guide: https://www.biggerpockets.com/blog/wp-content/uploads/2022/08/Ultimate_Beginners_Guide_BiggerPockets.pdf

3. The Book on House Hacking Strategies by Bigger Pockets is also a fantastic book

4. Happy to talk if you want more advice

5. Connect with a realtor who understands house hacking and has invested themselves

6. Connect with a lender to see what you qualify for and how you can improve that situation

7. Go to local Real Estate meetups and learn from people there

[Carlos Scarpero]

I'ts buying a multi family property as owner occupant and getting rent on the remaining units.

It's lower down payment since you are owner occupant and lower rates too.

Easy way to get started.

Feel free to PM me with any questions.