House Hacking Bay Area (3.5% down, owner occupied)

[Adriana V Alvarado]

Hi everyone! I am trying to house hack (3.5% down, owner-occupied, rent other rooms) in the Bay Area (driving distance about an hour from Redwood City and SF). I have already been pre-qualified for a loan. I am debating between house hacking in the Bay Area for my first property or buying my first property out of state with the help of a property management company. I am looking to at least break even in California. I have a long term goal of building equity/appreciation. Does anyone have any advice as I am just starting out on my real estate investment journey. Thank you!

[Drew Sygit]

@Adriana V Alvarado you'll learn more and have better control over a local house-hack versus an OOS rental.

Just be careful of the tenant-friendly climate in California.

[Jake Andronico]

@Adriana V Alvarado

Congrats!! I've house hacked twice just over the hill in Reno, NV and it's changed my life. I now run them as rentals. 

If you're house hacking, you need to live in the home and can put 3.5% down. If you're going to invest OOS, you should check w/ your lender but you'll likely need 20-25% down. 

If you decide to stay in CA I would definitely suggest getting to know a good tenant/landlord lawyer that is familiar with lease creation and knows the process well. 

That's why I decided to live and invest in the first major city outside of the Bay Area in Reno. Still close by but much more friendly tenant/landlord laws, property taxes are 4th lowest in the Nation, strong appreciation, job growth, population growth, etc. 

Depending on how much you put down, your goal is definitely achievable. House hacking and buying a pure rental are very different strategies. 

Happy to share any insights I can. 

[Adriana V Alvarado]

Thank you!

[Wilson Lau]

Quote from @Adriana V Alvarado:

Hi everyone! I am trying to house hack (3.5% down, owner-occupied, rent other rooms) in the Bay Area (driving distance about an hour from Redwood City and SF). I have already been pre-qualified for a loan. I am debating between house hacking in the Bay Area for my first property or buying my first property out of state with the help of a property management company. I am looking to at least break even in California. I have a long term goal of building equity/appreciation. Does anyone have any advice as I am just starting out on my real estate investment journey. Thank you!

Hi Adriana. It depends how you define by breaking even. If you are looking for the tenants to cover the mortgage and property taxes, you are not likely to find anything between Redwood City and SF. You will have to look further such as the Contra Costa county. If you are looking for a place where your portion of the mortgage + property tax is close to what you are currently paying for rent, you can look into multiplex over at SF, Daly City, Redwood City, and San Bruno.

Feel free to reach out if you need any help :)