House hacking in 2024

[Account Closed]

Hey just wanted to hear of any recent success stories you guys have had with high interest rates and FHA loans in 2024. Also, does anyone know of any good YouTube or podcasts that are putting out new content in 2024 about house hacking and adapting to this market ? Thanks!

[Paul De Luca]

Quote from @Account Closed:

Hey just wanted to hear of any recent success stories you guys have had with high interest rates and FHA loans in 2024. Also, does anyone know of any good YouTube or podcasts that are putting out new content in 2024 about house hacking and adapting to this market ? Thanks!

 There are definitely success stories in Chicago and around the country. It just depends on your expectations for what looks like a win. Getting cash flow is much more difficult today, especially when putting around 5% down. If you're going to do that and want cash flow, you'll very likely need to at least make some cosmetic improvements to the units to raise the rents and then manage efficiently. And you'll likely want to consider more fringe & cheaper areas for lower prices & better cash flow.

I bought a 3-unit building in November last year when rates were 8% using a renovation loan (5% down), made cosmetic renovations to the units, and then we got way stronger rents than expected. Then I refinanced down to a 6.6% rate but had to pay points but I think it was worth it because it appears rates are going to be higher for longer. 

Many real estate investing content creators like BiggerPockets have shifted to telling people to focus more on appreciation, which is valid but most house hackers I talk to would like some cash flow once they move out or at least break even. Or if you plan on staying in the property for a while, some people aim to just pay less than their current rent.

In a real estate market where housing affordability is a major concern, house hacking actually stands out as an even more valid strategy than ever for buyers. It has gained a lot of interest from millennials and Gen Z in the last few years in particular.