All Forum Posts by: Shelton Davis Jr

Thank you for chiming in.  This seems to be the approach that I've been most advised to take.  So I'm leaning in that direction.

Originally posted by @Kim McGinnis:

I agree with the house hacking strategy!! Buy the multi family and have your mortgage paid by your tenants

Thank you for the response and sharing your real life experiences.  I will take these into account when making my decision.

Originally posted by @John Humphries:
Hey Shelton
Great question, and as always, the frustrating answer - It depends...
I'll share two of my experiences for context and maybe this will help in some way. When I moved to Toronto years ago, I found that rents were more expensive than cost to buy (assuming you had a down payment). In that market, I found a duplex where I wanted to live and house hacked. It worked out well and I learned many important lessons.
Many years later, I moved to a different town in BC. Here, I could not find any suitable duplexes and could not afford larger multis. It was also tricky to find cash flowing properties. My partner and I found a small 2BR/1BA, simple house that looked like it could be a decent rental one day. Not our dream home, but a good place to live for a few years at a reasonable cost (well less than what we could have borrowed). We were able to save up another down payment within a year and purchase another property as a rental when we did finally find a deal that cash flowed. 5 years later our market took off, rent prices included. Because we had bought such a cheap primary residence, we were able to hold on to it and rent it out with a large margin of cash flow. We've used that cash flow to help fund a much nicer property to live in and now have 2 rentals in this market.
My point here is that you can take what your market is giving you. Don't fight it by just deciding to buy a multi or to house hack. What makes the most sense in your market? What is going to make you happiest? I learned pretty quickly that I did not want to see my tenants every time I left my house in that Toronto property. Also, if this your first purchase, don't get too bogged down in the details or trying to make it perfect. You may not knock it out of the park on your first investment, but if you buy smart using what you learn from BP, it will likely set you up well for future investments.

Thanks for responding.  This is great information.  My goal is to start this journey off on the right foot.  In my mind it only seems right to house hack a multi family, but I like to get counsel and other peoples take before doing something so major. This information helps. I appreciate it. 

Originally posted by @Brandon Rush:

Hey Shelton, 

I say start your investing journey off right and go with the multi. Rich Dad Poor Dad Basics Here, the single family will be a liability requiring you to ditch out for the mortgage every month. House hacking the multi will decrease your living expenses significantly, allowing for greater flexibility in your life. Also remember 100% financed, means you will have a higher mortgage balance if you went with your SFR.

I say go the reverse route. Try to find a 4 family to house hack. Then maybe drop it down to a 3 and work your way down to a single family. Even with that single family, try to find something with some kind of value add component to it. Maybe a foreclosure or something off hudhomestore.com, and then house hack that as well. 

You will get your "nice" single family one day, but if you jump right into it for the instant gratification, you may end up kicking yourself in the butt. 

To each their own, I am a sucker for house hacking. I am on my second one now and have gotten use to not paying a mortgage (I use to own a single family but sold it). Its the same feeling as not having a car payment anymore, you feel a bit more free.

Good Luck Shelton!

Thank you for taking the time to respond. 
I’ve thought about doing it the way you’re doing it as well. Staying in my current location where I rent but owning investment properties.

Originally posted by @Grant Thompson:

Shelton,

It is hard to say without knowing what you would buy. I currently own several investment properties and still rent because the returns look more attractive to me. I look at a primary residency as a lifestyle choice, but that is my personal view.