All Forum Posts by: Victor So

@Anh Ngo Hey Anh, it's great that you're getting into the game so early! And househacking right out of college is a great idea! Just FYI- even right out of college, you can qualify for a FHA loan as long as you have a letter of employment. Your college years sort of qualifies as the 2 years of steady employment. Hope this helps!

@Kevin Bennett

Welcome Kevin! BP is definitely the place to be in order to educate yourself and receive help from others!

Not sure if you know this though...but when you get a fha loan for 3 flat, it has to pass the self-sufficiency test. Basically, this means rental income has to be greater than the mortgage (PITI) which has been difficult to do in many areas of Chicago.

To get around this, I look for 2-flats (note: the self-sufficiency test doesn't apply to SFH or 2-flats) with a finished basement or attic. And then I try to live in the finished basement or attic while renting out the other units. Or, I can live in one unit, rent out another, and airbnb the extra spaces.

This way, you don’t pay as much for a legal 2-flat than a 3-flat and you can cash flow better.

Hope this helps!

@Reed Meyer Hey Reed, this is from my lender. I asked my lender if you would qualify for a fha loan.

This was her response...Given that you have an offer letter from a job after college:

“He sure can- the college counts as part of his needed 2 years experience and once he has an offer letter for work and 1 month of paystubs he can close on a home!”

Hope this helps! PM me for my lender’s info. 

Victor

@Reed Meyer Hey! I work a full time job and have been questioning the same thing. For now, I househack (currently on my 3rd) and spend time outside of my job to DIY and fix up my home. I just bought a duplex with a finished basement. I will live in one unit, rent by room in the other unit and rent the basement out on airbnb. The place I bought is already rentable as is. However, I'm making some upgrades to it by laying my own floors, repainting certain areas, tiling the kitchen, etc. This way, I can accelerate my savings so I can househack next year. Eventually, I plan on BRRRR-ing rental properties but at the very least you should consider househacking before doing anything. Hope this helps!

@Michelle Dong

Hey!

Personally, I wouldn’t. Depending on the type of house hacking you want to do, it may be worth doing it in an area you want to be in.

To make the numbers work though, you may have to get a little creative. For example, I househack duplexes with a finished basement or attic. Then, I live in one unit, rent by the room in the other unit, and airbnb the basement or attic.

It’s been working great for me!

@Ellie Narie

Hey!

Look into a streamline refinance! That’s what I did to refinance out into a conventional loan even though I didn’t have 20% equity (I think...don’t quote me on it though). Truthfully, I don’t remember the logistics but it may be worth looking into!

Victor

@Ryan Taylor If you're going with a SFH, you can go with a FHA or low down conventional. You can avoid MIP that way. But there are different nuances. I've done a 5-10% down payment on a conventional before.

Hey @Ryan Taylor ,

Would your wife be open to airbnb-ing extra rooms? That’s what my wife and I did. My last unit had 3 bedrooms and 1 bathroom. There were 2 bedrooms in the front of the unit. The kitchen and the other bedroom were on the backside. So, we sort of compartmentalized the home by adding a curtain dividing the front and back. 

We rented out 2 of the rooms on airbnb. We made it clear that guests didn’t have access to the kitchen upfront. We lowered the price a little relative to what others were charging. And we will still got bookings throughout the month. Many guests don’t need a kitchen. They just need a place to crash overnight. 

And it was much more private because the guests used the front door so it was sort of like their own entrance. We used to the back door. 

It was a little uncomfortable at times since we had to share the bathroom but overall it wasn’t bad. Guests were very considerate and used discretion when using the restroom. Overall, I averaged 1200-1400 a month just renting out the rooms. 

@Ryan Taylor

Hey Ryan!

Where do you currently live? If possible, would it be an option for you to rent out your current place and move into another place with a FHA loan? If renting the entire house doesn't cash flow, would renting by the room be another option for more cash flow?

@Willie Bradley

Several things come to mind:

1) MIP

2) You have to live in the property for one year.

3) For a 3-4 unit property, you have to pass the self-sufficiency test.

Also, $600 bucks probably won't be enough to close on a multi-unit. Closing costs can be fairly significant especially considering all the fees and MIP.