House Hacking in San Francisco

[Jimmy Jarjour]

Hi Everyone,

This is my first post! I've been enjoying listening to Bigger Pockets podcasts for a while and read a couple Bigger Pockets intro books to real-estate/house-hacking. I am trying to house hack a 4 unit multifamily (FHA 3.5% down, owner-occupied, rent other rooms) in San Francisco or Los Angeles and could use a bit of help starting out!

I have created a spreadsheet for quick analysis (with the 2% rule, 12% cash on cash, total ROI of 15% per year, etc) and have just been analyzing any Zillow deals that pop up. It seems that with house-hacking, it's possible to cover my mortgage living in 1 unit and renting out the other 3. I'm trying to avoid analysis-paralysis so I figured the first step was to start communicating with the real-estate community! Attempting to absorb as much as I can to eventually buy my first house-hack by the end of the year.

I would really appreciate some advice on the following topics:

- Finding a good loan officer

- Finding a good realtor

- Any local networking events

- General advice on where to start

- SF is primarily old constructions (a lot under 1920s). Since SF is a special case, this risk is pretty common. Should I stay away from these old SF properties? Advice/Recs on a good inspector for old properties?

If you are also trying to house-hack in the San Francisco/Los Angeles area, I’d love to connect! It will probably be helpful to share our knowledge and work towards the same goal.

I’m also open to helping out in other areas to gain experience/knowledge in the field so if you need a hand please don’t hesitate to reach out.

Looking forward to meeting you all and excited to join the Bigger Pockets Community!

Best,

James Jarjour

[Matthew Kwan]

HI Jimmy,

Indeed, you can definitely  househack in a multifamily by living one unit and renting out the other vacant units. The good thing about househacking a legal multifamily unit is that lender allows you to use the vacated units of 75% market rent as an income to offset the potential current mortgage. You can put a little as 5% down payment for conventional or 3.5% for FHA.

Alternative way, is to acquire the 2nd property as an investment property with conventional, while putting 15%-25% down payment. Down payment can be higher than primary, but the good thing is that you won't need that much income to qualify because lenders can you 75% of the market rents for the units of the property. Imagine the 2nd property is a 4plex, each unit can be rented $1500/unit of 75% =$1125 x 4 units =$4500 worth of income to offset your that 2nd property.

@Albert Bui @Carlos Valencia