Considering House Hacking in San Francisco, thoughts?

[Kevin G.]

I am considering house hacking in San Francisco with my wife and two small kids. I've noticed many multi-family options available, with some promising the possibility of living almost rent-free. However, I'm wondering what the catch is.

My main concern is the current vacancy rate in San Francisco, which I know is higher than in previous years. I'm looking to use the lowest available down payment option, preferably 3%, either through a conventional or FHA loan if the conventional option doesn't allow for such a low down payment. Luckily, my credit score is great, so hopefully, I won't need to go the FHA route.

I'm specifically looking at 4-plex properties with at least 3 bedrooms for my family and ideally 2 bedrooms for the other units. I've already seen some of these properties on the market. However, it's concerning to see many sellers dropping their prices and numerous rental properties available in San Francisco.

Considering I'll be putting such a low down payment, my price range is likely around $1.2-1.4 million.

My plan is not to stay long term. We’d only live in it for 1-2 years max, and then ideally be cash flowing by then.

I would appreciate any thoughts or advice on this matter.