How can I get into house hacking as a 19 year old with not much money?

Question

How can I get into house hacking as a 19 year old with a small car detailing business? I do not have much money right now because I put a lot of my own money into my business. I am currently studying for my IT certification and plan on getting my real estate license too. Will I be able to get an FHA loan without a full time job? What are the some of the first steps that I should take so that I can eventually buy a Triplex, or a Quadplex property?

Adrian Smude · Answer

I started out with a single family house and rented out the rooms. I did this at 20 years old. Keep going to different community banks, credit unions, and mortgage brokers all asking how you can get a loan. What would you need to do to be able to.

One of my students, at 19 years old,  worked as a handyman to save enough money to buy, fix, and flip a mobile home within the park. This gave him a larger chunk of cash to be able to make more decisions with.

Best of luck!

Ryan Thomson · Answer

Check out some of these resources for getting started:

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

Ryan Thomson · Answer

Here is an interesting idea. Use your knowledge and drive to convince your parents (or other co-signer) to get a home near you. Co-sign with them and put some money down with them if you can.

Buy it as YOUR primary residence with your parents as the co-signers. This would allow you and your parents to only have to put 3.5-5% down. Then you rent out the rooms to your friends. This will probably allow you to live for much cheaper. Not to mention you can both cash in on appreciation and loan paydown.

You obviously need to convince your parents or (someone who would co-sign and help with the downpayment) about how good of an idea this is. But if they are savvy money people and they trust you (which I bet the do), then this seems very doable. Maybe give them part of the equity or a monthly fee until you refinance and get their co-signing off the loan.

Ben Firstenberg · Answer

Qualifying for the loan will depend on your credit and income. FHA won't like that you have your own business (even though it's a great achievement). You may need to consider asking your parents or others to cosign on your loan to help with the credit/income aspect.

For now, I'd focus on building up your savings and keeping your expenses as low as you can. House hacking is as much about learning to live with less as it is buying the house and renting the rooms/units.

While you're doing that, spend time looking at the homes available in your area. Try to get a good sense of what good deals look like and what kind of deal would be best for you. That is, do you want to renovate, or buy turnkey? Do you want a house with 5 bedrooms, or is a 3-4 unit better? Get an idea of price to rent ratios and try to learn the market as much as you can. That way, when you have the money and the credit to buy, you'll be ready.

Hope that helps. I know it's "boring" advice, but real estate is often boring

Ryan Thomson · Answer

@Jacob Brush I wish I was thinking about house hacking at your age! Good job. It will be tough to get started but once you get in it will snowball and you'll be in a great spot. Keep up the grind.

To qualify you will need two years of tax returns in order to use your business income to qualify. You could also get a co-signer if you don't make enough.

The first steps are education, saving up money, and making enough income to qualify.

There are down payment assistance programs that will give a 0% interest loan on your downpayment. Basically free money.

How can I get into house hacking as a 19 year old with not much money?

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