All Forum Posts by: Katarina Bishop

Hi @Katarina Bishop

Like everyone has said, be careful buying a property with your boy friend...you might end up getting married and buy more properties! It happened to me. I bought a 2-family house hack with my girlfriend in Beverly, MA on the North Shore. Then we got married. We closed on our second house hack in February in Salem, MA.

House hacking, in my opinion, doesn't need to cash flow from day 1. It NEEDS to drastically reduce your living expense to make any kind of sense. For example, my then girlfriend (now wife) and I were paying a combined $1850/month with our rents (She paid $1,100 and I pay $750). After we bought our 2 family, doing some rehab, raising rents, doing a refinance of our mortgage, we were each paying ~ $150/month out of pocket plus some in utlities, and gained over $200k in equity. We recently moved out and rent the second unit and clear $1,700 above our mortgage (which is not to be mistaken as all the expense of owning a rental).

A few tips, that some others have shared as well:

1) Try looking at 3 and 4 units buildings. Those have a better chance of cash flowing while you reside in the building.

2) 2 family that are larger in bed room size could also work for you if you are willing to live with roommates.

3) Value add properties will help build equity.

4) Have cash reserves when you are buying and keep adding until you have a good cash cushion.

5) If your property doesn't produce cash flow day one, then the big win is the money you are saving every month. Going back to my real life example: Going from $1850 (total rent we were paying) to total $300 out of pocket towards our mortgage, savings of $1550 every month! Use that excess cash to put towards bad debts, your next property, or other investments.

Sorry for the repeat information and advice. House Hacking does work and is very powerful! Good luck!

Jon

Hi Katerina!

My girlfriend and I are looking to house hack a multi-family in Quincy and were wondering how the process has been going for you and your partner.

Thanks!

Hi Katrina, +1 to everything Jon said! One thing to keep in mind with qualification as well is that on 2-4 unit properties you can use estimated (or actual/in-place) rental income to qualify for your mortgage. Using this strategy I was able to qualify for a $1.44mm mortgage on my house hack when I would've only qualified for about $800k without the rental income.

The specifics of this will vary from property to property but as you are looking your lender should be able to write updated pre-approvals on a house-by-house basis. Happy to chat further on this if you are (or anyone else is) interested!

Hey!

My girlfriend and I did exactly this about 15mo ago. We did a house hack BRRRR and are now on to our third unit.

I have a bunch of tips, resources and excel docs to help with the search. Happy to connect and provide any insight. It is absolutely the path to go in a HCOL area like Boston!

best of luck,

Jon

If you feel secure with you bf enough to buy a property I would encourage you to save both of your FHAs individually so you can purchase 2 properties with it with the exception that you cannot qualify for something significant separately. Househacks are possible in Boston but it's not going to be Boston proper because the purchase prices are higher ($750-1mm) unless you do single bed rentals mixed with Airbnbs. The alternative to that is expanding outside of Boston to 30-1h where you can find better priced assets and less competition using FHA.

Hi Katarina, I actually had a similar conversation with another BP member yesterday so would be happy to connect for a conversation if that helps. I grew up in the Boston area and can share how I got started in this market, especially with the challenge of finding cash flowing properties in the Greater Boston area. I am an agent/partner with Compass in downtown Boston, but I have a background specifically related to investment properties as I hold my CFA designation and spent nearly a decade in investment management while building a RE portfolio on the side before transitioning full-time to RE.

Hey Katarina, 

If you plan to house hack a multi-unit property, then I wouldn't worry too much about the monthly cashflow right of the bat. I'm not familiar with the Boston area, but I would have to guess your out-of-pocket cost every month would be way less (if not zero) house hacking than if you rented elsewhere or purchased a single family. If you "break even" while house hacking, that's great! Once you move out down the road, then you would start cashflowing. 

House hacking is probably the best way to get started in REI, and FHA (3.5% DP) makes that even better. Not impossible by any means. Best of luck!