House Hacking Still A Thing?

[Seven Mata]

I came across bigger pockets and I became infatuated with Real Estate & the house hacking strategy. I am wanting to invest 100% into real-estate whether it is flip and sell and/or long term rentals. I would need a multiple unit since I have family and kids. Unfortunately, now I'm realizing house hacking might not even be a thing with the new test they are doing in 2023. I was planning on using an FHA loan 3.5 % down but I make about 80k a year and have about 120k saved liquid. Any advice on how to invest my money in real estate while being the most efficient? Thank you.

[Bill B.]

Buy a nice house with an ADU or a DADU? Can you swing a duplex? Where are you living now? If you own that can it become a rental?

Ps. I just saw a post by @kenny Simpson (who for some reason doesn’t show up in @ search, that said there was a Fannie Mae low downpayment option with no self sufficiency test…) maybe you can find it though I don’t know why I couldn’t mention him. 

[Benjamin Sulka]

Quote from @Seven Mata:

I came across bigger pockets and I became infatuated with Real Estate & the house hacking strategy. I am wanting to invest 100% into real-estate whether it is flip and sell and/or long term rentals. I would need a multiple unit since I have family and kids. Unfortunately, now I'm realizing house hacking might not even be a thing with the new test they are doing in 2023. I was planning on using an FHA loan 3.5 % down but I make about 80k a year and have about 120k saved liquid. Any advice on how to invest my money in real estate while being the most efficient? Thank you.

 Seven, 

Starting on November 18th of this year, you can purchase a home with 5% down conventional loan and owner occupy a 2,3, or 4 unit multifamily. 

With the amount of savings you have, doing 5% down on a property wouldn't hit you much harder than 3.5% would. 

House hacking is absolutely still a thing and many people have been successful with this strategy. The goal is to reduce your living expenses, make some renovations to the property while you live there and learn how to be a landlord. This might be a little more tricky with a family and kids but people have done it, so you can too. 

Run your numbers for how things will look AFTER you move out. Just make sure to consider PMI (private mortgage insurance) in your calculations since you'll be putting down less than 20%.

If you're a new investor (like me), I would start with a house hack and get your feet wet. Network, stay active on Bigger Pockets, read your books, and go to real estate meetups. Most people don't recommend getting started with a flip especially if you don't have reliable people in your network like contractors and an agent. 

Happy House Hacking! 

[Benjamin Sulka]

Check this out: https://thisismortgage.com/fannie-mae-5-percent-down-multifa...

[Jake Andronico]

@Seven Mata

As @Benjamin Sulka said, huge news for house hackers!!

Does not need to meet the previous sufficiency test. 

[Dominic Rosato]

House hacking is absolutely still a thing! Don’t let the media tell you otherwise. Stay determined and reach out to professionals near you to get started. They will quickly help you realize what you can expect. Also- $120k in liquid cash is a LOT more than most investors start with - I’d say take your opportunity and run with it :)

[Carlos Ptriawan]

Quote from @Seven Mata:

I came across bigger pockets and I became infatuated with Real Estate & the house hacking strategy. I am wanting to invest 100% into real-estate whether it is flip and sell and/or long term rentals. I would need a multiple unit since I have family and kids. Unfortunately, now I'm realizing house hacking might not even be a thing with the new test they are doing in 2023. I was planning on using an FHA loan 3.5 % down but I make about 80k a year and have about 120k saved liquid. Any advice on how to invest my money in real estate while being the most efficient? Thank you.

 it is not just a think but the best way to overcome interest rate hike in owner occupant home is to househack, regardless it is SF or MF.

[Daniel McDonald]

House hacking absolutely still exists! With the rates yes it will take more finesse and creativity but still very doable. Most people assume house hacking means you have to live for free but that isn't true at all. If you're lowering your living expenses at all while buying an asset then I consider it a win. 

If you have a family I love the ADU idea. maybe turn it into a STR/MTR for max profit? They're really a ton of different things you could do. But my first thought would be to become an expert in your market. Figure out what makes sense/what is realistic.

[Griffin Malcolm]

Quote from @Benjamin Sulka:

Check this out: https://thisismortgage.com/fannie-mae-5-percent-down-multifa...

 this is actually massive. great news!

[Elizabeth Flores]

SM @I do house hacking and it is worthy. I will advise to buy a home with many rooms, your income will be higher. if one moves out, you have the other tenants paying the rent, which is different if you rent to only one person. Just find the right tenants and you will be fine. The only thing is that you will be handling more tenants that only one; but we have to sacrifice if you want to get your goals, that is how I see it. Padslip has that model, it is a kind of the competition for people who do house hacking :P

Good Luck in your search and investment. 

[Rick Albert]

You can house hack and do well. You may not cash flow, but you still get tax benefits, loan buy down, etc.

One interesting option from what you are saying is a live in house hack. Buy a 2-4 unit with either 3.5% down or 5% down, make valuable improvements that will increase equity, and in two years time consider selling. This way the first $250k (if single) or first $500k (if married) of the profits are tax free. Plus there is demand for MFU with vacant units (since you would be living in at least one of the units).

[Eric Mensah]

Quote from @Seven Mata:

I came across bigger pockets and I became infatuated with Real Estate & the house hacking strategy. I am wanting to invest 100% into real-estate whether it is flip and sell and/or long term rentals. I would need a multiple unit since I have family and kids. Unfortunately, now I'm realizing house hacking might not even be a thing with the new test they are doing in 2023. I was planning on using an FHA loan 3.5 % down but I make about 80k a year and have about 120k saved liquid. Any advice on how to invest my money in real estate while being the most efficient? Thank you.

 YES! House Hacking is still a thing. I am doing it now with a Fourplex. With the new Fannie Mae 5% conventional loan downpayment rule, 120k is way more than enough. Depending on the market you are currently in, you can buy, for example a 700k quadplex or duplex and your downpayment would be about 35k. Adding  about 2.5% closing cost of 17.5k will bring you to about 50.5k (rough estimate) out of pocket. 

[Carlos Scarpero]

Very much still a thing. Seems to be more common than ever now that affordability is a challenge. Feel free to reach out to me for advice on the loan side of things.