House Hacking Advice (Washington D.C, Nova, Baltimore Area)

[Timothy Lawrence]

Hello All,

Today is the day I decided to upgrade myself from being a lurker to being an actual poster. For some background info, I am 22 years old, and I graduated college in May 2024 with my bachelor's in construction management. I am currently employed as a project engineer working for a GC that builds multi-family projects. Being a curious person, I gained an interest in real estate investing due to other classmates being interested in real estate. I completed an internship in commercial real estate, and I also attended a couple of local REIA meetings/networking events before moving to Northern VA.

I was able to narrow down potential strategies, and I figured both BRRR as well as wholesaling don't seem to be the best strategies for me. House hacking seems like the best strategy for me.

My goal is to purchase a single-family home in Maryland, D.C, (from lurking I've heard D.C was terrible for investing) or Virginia with multiple rooms where I'm making monthly payments similar to what I pay in rent and other charges ($2000-$2500). In other words, I can afford the house with or without tenants. I can put up with a 1-hour work commute or a little more if it means having a house in a decently safe area.

Other Info:

Credit Score: 700s (due to student loan payments)

Monthly Income: $4600

Work Location: I commute to Northern Virginia and D.C

Guys, I could really use your help or recommendations on what you would do if you were in my situation:

Location: I'm thinking somewhere in PG County MD due to my commute, like Hyattsville MD. I could market the property to UMD College Park Students. Any other recommended towns or locations? (Areas around an hour or less away from D.C that people would live in)

I'm sure there are people who live further in Virginia and probably commute in Northern VA or D.C. Where might some of those people live?
 

Financing: I'm confident I can put $10,000 down as a down payment within the next year. Do you know any FHA Lenders in the area? If, so please recommend any. What other kinds of loans or financing strategies are available that don't involve using too much of your own cash? Have you ever taken out a loan to afford the down payment for a mortgage and do you know of any lenders that offer that?

Or is it silly to take action in that regard and just save enough cash? For example, more downpayment means less interest rate regardless or whatever loan.

I am trying to see what sort of action I can take right now so I can plan detailed and measured steps to my goal. If it's not feasible due to circumstances I suppose I'll have to adjust my situation (find weekend job, move back to NJ with parents, move to a different state with, etc.)

All responses are appreciated, and I am absolutely open to chatting on the phone by the way.

[Jack Seiden]

Quote from @Timothy Lawrence:

Hello All,

Today is the day I decided to upgrade myself from being a lurker to being an actual poster. For some background info, I am 22 years old, and I graduated college in May 2024 with my bachelor's in construction management. I am currently employed as a project engineer working for a GC that builds multi-family projects. Being a curious person, I gained an interest in real estate investing due to other classmates being interested in real estate. I completed an internship in commercial real estate, and I also attended a couple of local REIA meetings/networking events before moving to Northern VA.

I was able to narrow down potential strategies, and I figured both BRRR as well as wholesaling don't seem to be the best strategies for me. House hacking seems like the best strategy for me.

My goal is to purchase a single-family home in Maryland, D.C, (from lurking I've heard D.C was terrible for investing) or Virginia with multiple rooms where I'm making monthly payments similar to what I pay in rent and other charges ($2000-$2500). In other words, I can afford the house with or without tenants. I can put up with a 1-hour work commute or a little more if it means having a house in a decently safe area.

Other Info:

Credit Score: 700s (due to student loan payments)

Monthly Income: $4600

Work Location: I commute to Northern Virginia and D.C

Guys, I could really use your help or recommendations on what you would do if you were in my situation:

Location: I'm thinking somewhere in PG County MD due to my commute, like Hyattsville MD. I could market the property to UMD College Park Students. Any other recommended towns or locations? (Areas around an hour or less away from D.C that people would live in)

I'm sure there are people who live further in Virginia and probably commute in Northern VA or D.C. Where might some of those people live?
 

Financing: I'm confident I can put $10,000 down as a down payment within the next year. Do you know any FHA Lenders in the area? If, so please recommend any. What other kinds of loans or financing strategies are available that don't involve using too much of your own cash? Have you ever taken out a loan to afford the down payment for a mortgage and do you know of any lenders that offer that?

Or is it silly to take action in that regard and just save enough cash? For example, more downpayment means less interest rate regardless or whatever loan.

I am trying to see what sort of action I can take right now so I can plan detailed and measured steps to my goal. If it's not feasible due to circumstances I suppose I'll have to adjust my situation (find weekend job, move back to NJ with parents, move to a different state with, etc.)

All responses are appreciated, and I am absolutely open to chatting on the phone by the way.

My view on house hacking is it can be a great tool to buy a house you could not  otherwise afford, but it shouldn’t be a goal in it of itself if that makes sense and that’s not to discourage you from investing just there are alternatives such as the stock market. so I’d start by asking where you want to live, do you want to own a single family home or does it make more sense to rent in a more interesting neighborhood like Arlington, Alexandria, that’s gonna be a personal choice, Will your monthly payment actually be less than renting/how many people do you need to get in the house to afford that? Do you have a plan to eventually be able to afford the home with let’s say one roommate so you don’t have 5 roommates when you are 30? Again none of that is to discourage from house hacking just to say you should house hack because you want to own a home not necessarily because it’s a great investment because I’m not sure how much better it is than investing elsewhere with the market where it’s at today.

[Daniel Amsalem]

Great questions Timothy. I was in a similar position a few years ago, but fortunately got married and our combined incomes helped us qualify for a larger house hack.

We're on our second one in NOVA, Alexandria to be exact, and instead of rent by the room, we are renting out our walkout basement on Airbnb to monthly guests.

That said, we have a number of friends doing well with rent by the room across NOVA, though they're purchasing homes with 5+ rooms or finding homes that can be renovated to include that setup.

I'd recommend attending meetups such as the one I cohost, NOVA REI or Cashflow Breakfast Club or any of the others to meet those who are house hacking. It's a great strategy but I agree with @Jack Seiden, having roommates at 30 isn't ideal. As you discover opportunities, continue looking for the longer play!

[Ashish Acharya]

@Timothy Lawrence House hacking in PG County, MD, or nearby areas like Hyattsville, Silver Spring, or Alexandria, VA, is a good option, especially with student tenants from UMD. With $10,000 saved, an FHA loan (3.5% down) is a great choice, allowing you to afford a property around $280,000. Look into FHA 203(k) loans for repairs and down payment assistance programs in your area. While borrowing for a down payment is risky, increasing your savings will lower your interest rate. Focus on saving and researching financing while networking with real estate professionals to prepare for your first investment.

Dont forget to add tax savings to your ROI for better decision making.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

[Jonathan W.]

Agree with above posters. A basement conversion could make sense (either STR or LTR depending on how much work/headaches you are willing to take on). I have experience with this strategy in Arlington and Alexandria city. A colleague of mine has bought two properties owner-occupied back to back in Arlington (with a 5% rate and a 7% rate) doing basement conversions and renting rooms, lowering his effective monthly payment on each property to sub 2K each time. I highly prefer Virginia for LTR buy and hold. Let me know if you'd like to discuss further.

[Greg W.]

Buy in an area you want to live and renting to the people you want to rent to. Do you want to rent to college students when you are 30? That's some people's niche and it works for them. Is that you? You could rent to young professionals or to families. I would buy in the best area you can afford, to hopefully get appreciation over time. Buy where people want to be. If you can buy a fixer in a great area, that's even better. Also look at the rental laws in the areas you are considering, just so you understand what you are getting into and whether you are OK with them or not.

[Jake Andronico]

@Timothy Lawrence

Congrats!! Sounds like you have a great plan. It will not be sexy, but it can change your life (I've house hacked twice and it's certainly changed mine). 

Here is what I learned, my mistakes, and what I regret house hacking starting at 22: 

https://www.biggerpockets.com/forums/922/topics/1133476-hous...

[Cody Anderson]

Another option would be to consider co-buying with someone else. If there's a family member or friend in a similar situation, and you can both align on the initial plan (location, home type, price, usage/occupancy, etc) you can pretty easily get a co-ownership agreement in place and even a joint mortgage.

The benefit here is it might open up your ability to buy a larger place in a nicer area which could lead to a faster rate of appreciation and overall better living environment. 

Something to think about. I've been co-owning for 8 years and its been great although it does come with risks requiring serious consideration.

Best of luck!

[Mike Webber]

Hey Timothy,

House Hacking is a great strategy in this area. I'm an agent and investor and about 80% of my buyer clients all house hack. I'd be happy to talk about the strategies that work best for them. A lot of my clients buy in Alexandria because of the strong rental market and laid back laws on short and midterm rentals. 

I've had clients rent by the room short and midterm and covered their entire mortgage. If you don't mind a little more management, renting by the room and midterm can bring in a lot more revenue than renting just the basement or other unit if you get a duplex. 

[Russell Brazil]

Hyattsville and surrounding areas are more affordable than other parts of the metro.  If I was looking in PG County, I think Hyattsville and College Park would be my main targets. I love Mt Ranier, but the property tax rate is crazy. High rental demand for room rentals in Hyattsville and College Park. But those renting rooms in the area, can be difficult to deal with.