I am 40 years old. Never owned a home. Currently renting an apartment. Want to start my real estate portfolio/investment journey. I am considering house hacking. Just not in California, where I currently live.
I was renting an ADU in Manhattan Beach when I started. Purchased a SFR out of state but in an area I was familiar with. It’s been cash flowing since 2018 but I wish I would have known about house hacking back then… 😅
Just don't "consider" house hacking. Take action and take advantage of it FHA 3.5% down, has to pass self sufficiency rule Fannie Mae 5% down, Freddie Mac home possible 5% down but you have to be 80% of area median income VA 0% down USDA 0% down Native American Loan 2.25% Each state has their own first time home buyer loan programs and down payment and closing cost assistance programs
Thank you for sharing such practical advice on house hacking! I found the discussion on leveraging residential financing and preparing for lender conversations extremely helpful.
Good point about your write-offs and writing off too much expenses on your taxes. I made that mistake when I was remodeling my apartment units and it made it so where I couldn't qualify for a property. I fixed that the next year by using depreciation because my remodels were Capital improvements which can be depreciated and added back in to your income to help you qualify for a mortgages
Awesome insight. We already have a primary with a VA loan, can we use the VA loan again if we rent out our current home? Thank you for making us smarter investors.
Refi to free up your entitlement and then rinse and repeat! The VA loan is the best in my opinion. I’m biased as a USMC veteran but it’s a powerful tool!
You need to look up how much remaining entitlement you have. I've used 0% down VA home loan Three times on 4plex's. I've had two VA loans at the same time. For my third purchase of of using VA home loan on a 4plex I had to refinance out of the other VA home loans so I can restore my entitlement You can have more than one VA home loan at a time just depends on your remaining entitlement
To clarify my answer, in my market and those that I mainly work your entitlement is completely used on a single property. It’s great to be able to use it for multiple in cases of lower loan amounts 👍🏽
House hacking is the way to go! I wouldn't have a rental portfolio if it wasn't for owner-occupied financing. I've used FHA 3.5% once on a fourplex, I've used 0% down VA home loan three times on 4plex's , and I'm currently under contract on another 4plex in Mesa Arizona using Fannie Mae conventional 5% down.
Would I be able to build a brand new quadplex townhouse as a first-time home owner in california with no income on the side, and just a little bit of savings to start with?
There’s a 3 unit 3 car garage for sale near me. $600,000. if I put down the first time home buyer after everything it comes to $5,500 a month. If I live in one unit and rent out the rest, who the hell is gonna pay me $2,750 a month for the other 2 units? Seems like this dream of house hacking and becoming financially free at someone else’s expense is no longer viable. The market is ridiculous and people have to stay living with their families
The FHA Self-Sufficiency Test checks if rental income covers the mortgage payment on a multi-unit property. ✅ To pass, the rental income must exceed the monthly principal, interest, taxes and insurance (PITI). 75% of the total market rent (aka pro forma) for all the units has to be more than the total monthly mortgage payment. That total payment includes: principal, interest, taxes, mortgage insurance (PMI) and any other insurance (like homeowners insurance).
I am 40 years old. Never owned a home. Currently renting an apartment. Want to start my real estate portfolio/investment journey. I am considering house hacking. Just not in California, where I currently live.
I was renting an ADU in Manhattan Beach when I started. Purchased a SFR out of state but in an area I was familiar with. It’s been cash flowing since 2018 but I wish I would have known about house hacking back then… 😅
Just don't "consider" house hacking. Take action and take advantage of it
FHA 3.5% down, has to pass self sufficiency rule
Fannie Mae 5% down,
Freddie Mac home possible 5% down but you have to be 80% of area median income
VA 0% down
USDA 0% down
Native American Loan 2.25%
Each state has their own first time home buyer loan programs and down payment and closing cost assistance programs
Thank you for sharing such practical advice on house hacking! I found the discussion on leveraging residential financing and preparing for lender conversations extremely helpful.
Great message to those who don't think they can get started as an investor.
Lenders require a schedule e detailing cash flow expenses profit etc prior to financing. 2 years Usually.
Good point about your write-offs and writing off too much expenses on your taxes. I made that mistake when I was remodeling my apartment units and it made it so where I couldn't qualify for a property. I fixed that the next year by using depreciation because my remodels were Capital improvements which can be depreciated and added back in to your income to help you qualify for a mortgages
Awesome insight. We already have a primary with a VA loan, can we use the VA loan again if we rent out our current home? Thank you for making us smarter investors.
So I think you would have to refinance on your first VA loan to be able to use it on another property
Refi to free up your entitlement and then rinse and repeat! The VA loan is the best in my opinion. I’m biased as a USMC veteran but it’s a powerful tool!
You need to look up how much remaining entitlement you have.
I've used 0% down VA home loan Three times on 4plex's. I've had two VA loans at the same time. For my third purchase of of using VA home loan on a 4plex I had to refinance out of the other VA home loans so I can restore my entitlement
You can have more than one VA home loan at a time just depends on your remaining entitlement
To clarify my answer, in my market and those that I mainly work your entitlement is completely used on a single property. It’s great to be able to use it for multiple in cases of lower loan amounts 👍🏽
@@casasdenick yes you're right. It depends on which Market you're in. Higher priced markets might use up all your entitlement on one property
I have never paid PMI and haven't put 20% down in many years. You guys heard of VA loans?
House hacking is the way to go! I wouldn't have a rental portfolio if it wasn't for owner-occupied financing.
I've used FHA 3.5% once on a fourplex,
I've used 0% down VA home loan three times on 4plex's ,
and I'm currently under contract on another 4plex in Mesa Arizona using Fannie Mae conventional 5% down.
Would I be able to build a brand new quadplex townhouse as a first-time home owner in california with no income on the side, and just a little bit of savings to start with?
There’s a 3 unit 3 car garage for sale near me. $600,000. if I put down the first time home buyer after everything it comes to $5,500 a month. If I live in one unit and rent out the rest, who the hell is gonna pay me $2,750 a month for the other 2 units? Seems like this dream of house hacking and becoming financially free at someone else’s expense is no longer viable. The market is ridiculous and people have to stay living with their families
Does the self sufficiency test applies to multi family units for FHA?
Yes it does. 75% of the market rental income must cover the whole mortgage payment.
The FHA Self-Sufficiency Test checks if rental income covers the mortgage payment on a multi-unit property. ✅ To pass, the rental income must exceed the monthly principal, interest, taxes and insurance (PITI).
75% of the total market rent (aka pro forma) for all the units has to be more than the total monthly mortgage payment. That total payment includes: principal, interest, taxes, mortgage insurance (PMI) and any other insurance (like homeowners insurance).
Where can I find his contact info
In 1988, house it was 8% to 10% for house 🏠
But inflation/cost of living wasn’t this high