Single mom wanting to get started

[Kristyn Cross]

I'm a newly single mom (35 years old) to a sweet baby girl who just turned 1. I'm currently living with my parents. Living under my parents roof while trying to raise my daughter is too much and I need to get my own space. I'm very grateful that they have allowed me stay with them, but I think it's time I move out.

I have recently learned about house hacking and it excites me to think that I can get started in real estate investing with little down and I could possibly change me and my daughter's life. I don't want to live paycheck to paycheck and I really want to achieve financial freedom while doing something I'm passionate about. No one in my family has a clue about real estate investing and I grew up expecting to work the M-F from 9-5 and paying on a 30 year mortgage that will hopefully be paid off by the time I retire at the age of 65. I don't want that kind of life and I want my daughter to grow up knowing that there are other possibilities if she also desires something different.

I don't currently have a retirement account and I need to change this. I have my daughter full time and I currently work 2 days a week. My mom watches my daughter those 2 days while I work and I don't have to pay any childcare which Im very thankful for. While my daughter is so young I want to stay part time. I can afford to move out and rent something while working 2 days a week, but I know I would be living paycheck to paycheck, so that's where house hacking could possibly help.

I have an emergency fund and a good amount in savings. I've been listening to the Bigger Pockets podcast, but I'm just not sure where to start. I don't have anyone to talk to or ask. My family thinks I'm absolutely nuts when I talk about house hacking. They have no idea what I'm talking about when I bring up real estate investing. I do have a current real estate license that I never used, so I've really forgotten that knowledge.

What advice or tips would you have for me?

[Zachary Ware]

This is my personal opinion, so take it as you will. I think investing in RE is alot of hard work. If I were in your shoes, with access to free housing and baby sitting at the moment, I would work as much as you possibly could. I would try and build up as many funds as early as you can. RE is a great wealth builder but it can take alot of money to play the game. Keeo your living expenses as low as you can for as long as you can while you increase your income. Making a wide gap here is what leads to financial freedom. 

Goodluck on your journey! 

[Kristyn Cross]

I really appreciate the response and advice. I understand why you recommend to stay at home and save. Mentally, it's becoming really hard to live with my mom. There's a lack of boundaries on her part when it comes to me raising my daughter under her roof and the amount of pressure I'm facing with keeping her house perfect while trying to be a single parent is taking a toll. I'm so grateful for everything she's done to help, but I don't want to feel controlled especially while trying to raise my daughter. She's retired and loves babysitting 2 days a week, but she's not wanting to be a full time babysitter, which I completely understand, so 2 days a week is the most I'm working.

I would appreciate any advice you can give me when it comes to finding my own place.

[Kasey Blueford]

Hello Kristyn,

Love that you are looking to get into REI! I am aligned with a lot of what Zach mentioned above. At the end of the day, it will come down to you and your goals and decisions. It can be a lonely process initially but once you start building connections and a community, it will help. If you need to chat or just brainstorm, happy to assist. Please contact me if you need anything!

[Daniel McDonald]

@Kristyn Cross totally get the desire to want to move out. I had the opportunity to move home too and basically live for free and it wasn't worth it to me. There's more to life than just stacking cash. That being said I think this is taking a hard look at your current financial situation, we only heard about a small chunk but if I were you I would go through my entire financial situation with a magnifying glass. What is realistic when you move out? What could you afford? What wouldn't cripple you? Etc. I think this situation will be easier to reverse engineer than give you some broad idea.

I am also not familair with the AZ market but start looking around, what's popular, what areas rent the best, etc., and network as much as possible. Not saying this is doable with a small child but could you get to any meetups in the area? Network with other agents? etc. My thoughts here are just the possibility of finding a decent off-market deal. 

Next is the financing piece. You'll need to become an expert in your market (know what's realistic to spend) and see how you can come up with that. Maybe you already have enough for a down payment using an FHA maybe not, but you can explore programs too. Explore income-related lending options. For example, I know in Massachusetts they're are down payment assistance programs SPECIFIC to first time home buyers buying a multifamily. There could be something similar in AZ. Keep that RE license active, use that to fund part of your down payment. I totally regret not getting mine sooner.

Lastly, the only people who don't think you're crazy for buying real estate are the ones already investing themselves. If I had a dollar for every person who looked at me like a psycho for being a landlord but they're paying 3k for a 1 bedroom in the city I probably wouldn't need to invest at all😂. You'll learn to tune doubters out. 

Feel free to connect. I'm on my second house hack just north of Boston, but clearly love talking about this stuff  😄

[Hamp Lee III]

One of the best ways to get started is an owner-occupied property. No house hacking. There are a lot of great programs for first-time homebuyers. Start small, but take action.

Real estate investing is a long game.

I wish you all the best.

[Kristyn Cross]

What's the best way to build connections and meet like-minded people?

Please let me know if I did that correctly. I was trying to reply specifically to you. This is my first time posting.

[Theresa Harris]

What have you been doing with your money while living with your parents?  Have you been paying them rent or saving the money?  I'm guessing you were working full time before your baby was born.

What you can afford will be determined by your income and how much you have for a down payment.  Start by talking to a bank to see what you can afford.  You need to get your finances sorted first. Working 2 days a week may not be realistic.  Perhaps you can find another person with a kid and you watch their kid 1 day a week and they watch yours 1 day allowing you to work more.

House hacking is a BP term.  Just tell them you want a place where you can rent out a room to a roommate.

[Chad Quick]

Good advice here. I’m in the boat that there is always a way. I have a very similar history to yours. How bad do you want it? As in, are you ok with all of your money being tied into real estate for the next few years?

It doesn’t scare me, but it does others. Hard to say. 

[Josh Young]

@Kristyn Cross the biggest hurdle you will have is qualifying for a loan to buy a property. Working only 2 days a week might make it tough, you need to talk to a lender and learn what DTI (Debt to Income Ratio) you will need to qualify, usually a max of 50% if you have great credit, lower if your credit is lower. A good lender will help you create a plan, so you can qualify, that's the first step. Message me if you want to talk to my lender, they specialize in educating first time home buyers.

[Mike Dymski]

There are two primary ways to work two days a week, own a home, and stay at home with the kids.

1 - Have a high earning significant other

2 - Be financially free already

[Dan H.]

The 2 days is limiting but I understand your mom’s willingness to babysit has limits.  The option that was first to pop into my head is a job that allows you to work from home. More days working should lead to high income. 

Next thing is how to finance. NACA has a lot of hurdles and I suggest if you go that route that you choose either a real estate agent or loan broker that has experience. However, if you can handle the hurdles it is a great program for lower income home buyers.

I would strive to Purchase a 2 unit (either duplex or a property with ADU). Live in the small/cheaper unit and rent the other unit. Ideally it starts with a cost near the same as renting. Each year the situation will improve as you raise the rent. In not much time you will be living subsidized by your tenant.

Optimize income.  Check.  Optimal financing. Check.  Slowly build wealth to improve your life.  Check. 

Good luck

[Kerry Noble Jr]

my advice.......go to the goodwill and get as many books as you can. read....read....read. Network as much as you can. Stay with your parents as much as you can and invest while there........ive been there trust me

[Francis Nasser]

Quote from @Kristyn Cross:

I'm a newly single mom (35 years old) to a sweet baby girl who just turned 1. I'm currently living with my parents. Living under my parents roof while trying to raise my daughter is too much and I need to get my own space. I'm very grateful that they have allowed me stay with them, but I think it's time I move out.

I have recently learned about house hacking and it excites me to think that I can get started in real estate investing with little down and I could possibly change me and my daughter's life. I don't want to live paycheck to paycheck and I really want to achieve financial freedom while doing something I'm passionate about. No one in my family has a clue about real estate investing and I grew up expecting to work the M-F from 9-5 and paying on a 30 year mortgage that will hopefully be paid off by the time I retire at the age of 65. I don't want that kind of life and I want my daughter to grow up knowing that there are other possibilities if she also desires something different.

I don't currently have a retirement account and I need to change this. I have my daughter full time and I currently work 2 days a week. My mom watches my daughter those 2 days while I work and I don't have to pay any childcare which Im very thankful for. While my daughter is so young I want to stay part time. I can afford to move out and rent something while working 2 days a week, but I know I would be living paycheck to paycheck, so that's where house hacking could possibly help.

I have an emergency fund and a good amount in savings. I've been listening to the Bigger Pockets podcast, but I'm just not sure where to start. I don't have anyone to talk to or ask. My family thinks I'm absolutely nuts when I talk about house hacking. They have no idea what I'm talking about when I bring up real estate investing. I do have a current real estate license that I never used, so I've really forgotten that knowledge.

What advice or tips would you have for me?

 Hi Kristyn! 

You're in the right place and taking the first steps to change your life. House Hacking is a great strategy that many wish to begin their real estate journey with. However, there's other ways to start that you could maybe look into as well. I would suggest for you to research about rent to own/lease options. I know a lot of investors that buy properties to lease them out to people who ultimately end up purchasing the homes after a few years. I think given your situation this may be a good option to be able to move out of your mother's house and also, at the same time, have the option to purchase a property. 

I would continue to network here in the forums, there's MANY people who will hop on a call with you to give you advice so don't be afraid to ask. You can also find live meetups in your area under the events section.

Good luck to you!

[Ben Einspahr]

@Kristyn Cross I can relate to growing up in a house hold where working the 9-5 and living in your forever home was the norm. But house hacking with a family is definitely possible as I am doing it with a little one of my own.

Your biggest challenge will be financing. A good option for you could be having someone cosign on the loan (like a parent) to help you qualify. At the same time, see what you can do to start saving up for that downpayment. There are a lot of grant programs out there that offer downpayment assistance to those who qualify.

Right now you are not surrounded around people that are familiar with or support your house hacking goals. You need to change that by regularly attending some networking events and connect with others that a where you want to be in 1-5 years. Check out the events under the learn tab on BP.

Last thing is education. A couple of months ago, we did 6 part webinar series on house hacking in our higher interest rate environments with case studies and interviews with industry experts. Focused in Denver by same concepts apply. Happy to share the recordings if you want… let me know. Best of luck!

[Noah Corwick]

Hi Kristyn, 

As other suggested, I would definitely lay out a plan of attack with a lender you trust. They will let you know how realistically approaching a house hack would look like. 

Fast forwarding the timeline, I do think house hacking is the best route to start. You get to move you and your daughter into a home and as long as you'd don't mind others living with you, they help you pay your mortgage. You kill 2 birds with 1 stone. 

You also mentioned that you have your real estate license. Utilizing this and working as an agent might be a great to earn some extra income and allow you to save up!

Best of luck overall! 

[Ryan Thomson]

@Kristyn Cross you are going down an AWESOME path. Here are some resources I found helpful on the way:

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

[David M.]

@Kristyn Cross

Find your local Real Estate Investment Assoction (REIA). That will be a way for you to find "like minded" people.

But, it doesn't sound like you have much capital saved up nor a solid income to obtain lots of financing.  That would be the first hurdle to purchasing your own property.

Just realize some people don't find "house hacking" desirable with a family.  Whether you house hack while renting out a bedroom or renting out the other side of a 2 family, you are living with or next to your tenant.  If the relationship goes sour, it can get back.  It doesn't have to, but there is that risk.

I hope this helps.  Good luck.