Author Topic: Talk through House Hack Idea with me  (Read 581 times)

LovinPSDs

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Talk through House Hack Idea with me
« on: April 04, 2019, 06:17:20 AM »
So I am considering a job in another city, meaning we would move.  My wife and I are looking into different forms on real estate investing (some what unrelated to this potential move) and I had an idea.  We have about 125K in equity in our current SFH which we would sell if we moved and I was thinking 100k would allow us to be a pretty sizable multifamily unit.... I mean 20% isn't required for something we'd live in as well right, and even if it was we could still do 500K which would go a LONG way in the area we're looking at.

Now I know it would take a relatively special property for my wife and family to get on board, but assuming we can find the right buy, I feel like we could make a HUGE swing in expenses and simultaneously jump start this real estate investing idea. What are your thoughts on general type of idea? 

I appreciate any and all comments!

-Ian

thd7t

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Re: Talk through House Hack Idea with me
« Reply #1 on: April 04, 2019, 06:30:08 AM »
Definitely get buy-in from your wife, but this is a very good idea.  You need to do due diligence and think about the rental units realistically, but it's a good idea.

A small item to note is that once you get above a fourplex, the building is considered to be commercial real estate and the rules change in terms of financing.

LovinPSDs

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Re: Talk through House Hack Idea with me
« Reply #2 on: April 04, 2019, 07:02:32 AM »
Thanks for the comments...

We haven't actually invested yet, but have run lots of analysis and get the general idea of what we're looking for... Opportunity to add value, suitable hack opportunity, cash flowing (leaving me with an exit strategy), etc.

Another benefit is my Brother-in-law is an agent and broker in the area we're looking to move to so he'll be able to help as well.

Finally, I didn't know where the commercial cutoff is so thanks for that info.   

Jon Bon

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Re: Talk through House Hack Idea with me
« Reply #3 on: April 04, 2019, 07:31:32 AM »
Yeah multi-families are different

In my city a 4-plex IS considered commercial so you get different (read: much worse) treatment in terms of financing and taxation.

Also a multifamily traditionally requires 25% down so something to be aware of.

Numbers would help a lot in getting you a better answer.  But lacking information income properties are a fantastic way to build wealth.




LovinPSDs

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Re: Talk through House Hack Idea with me
« Reply #4 on: April 04, 2019, 07:34:14 AM »
What would be the best way to determine if a unit is commercial or not?  From the two comments so far I've gotten above 4 units is commercial and 4 units IS commercial.

Is this handled at a local, state or federal level?

Jon Bon

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Re: Talk through House Hack Idea with me
« Reply #5 on: April 04, 2019, 08:34:17 AM »
Pretty much all of the above.

Financing, that is federal. So you check with a bank they will be able to tell you for sure. It has to be a loan that will be purchased by fannie/freddie. So it need to be a "conforming' loan

Taxes and permits are local, so those should be on your auditors website.

Again all real estate is local and sometimes it makes no damn sense. So take what you learn here with a grain of salt. Offer to take someone who owns a title business for a fancy dinner and pick their brain. They do deals all day, they know.....