Creative Finance House Hacking Advice for New Investor in a New City

[Andrew Brinkman]

I am a music producer and songwriter from Ohio, graduating from Berklee College of Music spring of 2024. I'm on an active search for ways to set myself up for success when I move from Boston to LA next summer. I believe creative finance and house hacking will allow me to get a head start on my investment portfolio and give me the space and time to grow my music career. I do not have substantial savings or enough income history to get a traditional loan. I would would love to start as soon as possible and avoid being a tenant and working 50 hours a week at a restaurant to make ends meet.
If anyone lives in the LA/Burbank/Studio City/North Hollywood area and has experience with house hacking and/or creative finance and would be willing to have a conversation with me, I will really love some advice. I have been reading and listening to as much as I can to learn how to do this, but still feels a bit overwhelming. thank you!

[Rick Albert]

Hey Andrew,

I've house hacked twice now in Los Angeles and happy to chat. I'm one of the case studies in the House Hacking Strategy that BP published.

On the surface because of the lack of income and savings, I don't think Seller financing will work. Many will want 20% or more down and with the lack of income might not present a lot of confidence. I know it's not what you want to hear, but it is important to set expectations.

Plus there are always costs to owning. This can be rehab, closing costs, etc.

My recommendation is go the FHA route and look at homes with ADUs and duplexes. Some lenders will count 75% of the actual or projected income from the other units to help you qualify. On a $1,000,000 purchase, that's $35K down plus closing costs. In some cases I've negotiated all closing costs paid. Rent out the other unit, and get roommates to help offset the costs. You won't be living for free, but it still beats renting.

Luckily you have some time. I would save up as much as you can to help with the down payment. Talk to a loan officer to see what your options are (you may be surprised on what you qualify for) and then plan accordingly. 

Good luck!