All Forum Posts by: Keong Kam

Hello BP!

I live in bay area and I am looking to see if I can house hack on a quad-plex. 

I am mainly looking in San Jose, Santa Clara area, and I know I know... super expensive, but worth looking right?

I don't think at our price range, house hacking in duplex does not buy me much in terms of reducing housing cost. e.g. ~1.2M purchase, maybe $2500 rent on one side. However, I see that if played right 4-plex might work e.g. ~1.8M purchase, $6-7000 from 3 units and live in one.

I am trying to see what kind of creative financing option I have to make this work. I called a couple of banks and they all say for 4-unit you have to put 25-30% down even for owner occupied case at this price range (>1.5M). I looked up FHA loan and it looks like the limit is ~620K so definitely not going to work. Does anyone have experience doing multi-unit property house hacking with financing strategy to minimize down payment and something like 5/1ARM with IO?

Thanks!!!!!

@James Kojo

This is good question, I also had this exact same question in mind recently.

It looks like a lot of good commercial MF deals come directly from brokers before it hits the market i.e. loopnet.

I read several people saying that deals go to loopnet to die... So sounds like relationship with reputable local commercial broker is key to get access to good deals early. However, I have exactly same question as you in regards to whether the broker bringing the deal to the investor is expecting to cover both sides (buyer and seller) transaction hence pocketing all commissions, as oppose to buyer having own agent. I wonder what people do typically. I feel like having one agent covering both side is definitely uncomfortable situation for buyer and also probably conflict of interest on the agent. 

Really curious about what experienced commercial investors on BP can comment on this. 

@Sagi Kumar

I live in for 2 years so that when I sell, I get capital gains tax exclusion for up to 500K. I know 1031 is an option but I also like to have this option available.

I think if you do FHA loan, you are required to live in for at least 1 year before you can rent it out.

I did conventional 30year loan with fixed rate on one property that I lived in for 2 years and started renting out. There was no requirement from the lender regarding how long I am required to live in it as primary.

The current place I am living is also on 30year loan but with 5/1ARM with much better rate. 

If you purchase a property as an investment property, the rate is definitely higher than primary home loan, but not by much. 

@Sandeep S.

I am definitely gonna look into portfolio loan. I like the idea of lower interest rate + interest only payment. This would definitely make my existing properties cash flow! I will let you know how it goes. Very cool!

@Account Closed

You guys are my hero! Wow that's very cool way (and very profitable!) to go about it. 

I've been only doing [buy - live in in for 2 yrs - rent out - buy another one - repeat] with traditional financing method in the Bay area. Of course, you cannot expand your portfolio nor build wealth fast enough this way...  So, do you guys know each other Minh and Sandeep? 

@Val Peare Absolutely. Let's connect. 

@Jake Riordan Good to meet you. I am interested in working with wholesaler in the area. Let's connect and work together. Thanks-

Hi @Micah Roos Thanks for the reply. I am more focused on MO side (north of river, KCMO, or raytown, grandview, belton area), but would be interested in JoCo if the deal is good. Joco is definitely a better class area for sure.