House Hacking - What is it
Simply put: House Hacking is using rental income to offset your own expenses. It can range from living cheaper to paying the entire mortgage and taxes to living free and having all of your bills paid for. Its a very broad term. House Hacking is RE investment strategy where the owner of a residential - usually 2-4 unit multi-family - rental property lives in one of the units. The tenants from the other units pay the mortgage and expenses. Most buyers are able to obtain a conventional loan or FHA loan with a very small downpayment because its their primary residence. This allows them to put money into the property, increase its value, refinance and sink that new money into another rental property to scale their business (BRRR strategy). Sounds great right? It is and I can help you.
Why do I love working with these buyers?
There are going to be some insights to my specific business here. It doesn't mean its the rule for everywhere, but its the general trend of my clients. Don't be a #Karen.
Usually easy to acomodate and flexible. The majority of my house hacking investor clients are Millennial single males or Millennial couples (come on single ladies where are you??). This puts them between 25-40. They care about a general location but they don't usually have specifics regarding finishes, architecture, or school district.
There are a ton of 2-4 unit multifamily properties in our area for this to work with.
The majority of them know that they're going to get their hands dirty and want to build their properties through sweat equity. They're down to watch a bunch of you-tube videos and jump in to learn how to lay tile or refinish hardwood floors but aren't too stuck up to allow someone with experience come and show them for some real hands on learning.
They're willing to learn from their mistakes. Offer denied. They're ok with taking a step back from the emotions of the process and look at the previous offer, analyze it and do better next time or realize that it just wasn't the right property for them.
Eager to learn as first time investors. They are hungry for knowledge and are willing to sit there, do the analysis for the property and learn. I can't say the same for some of my older clients or seasoned property owners (even if their analysis is less than great).
Their follow up kind of sucks but in general they appreciate a quick text and are willing to jump on a zoom call to share screens and analyze. They don't necessarily want to meet in person which is much easier for me as a mom of young children.
They tell their friends, who are usually investors. Referrals mean everything in real estate.
They're going to be repeat clients sooner than residential buyers. The majority of my clients bought (or are planning to buy) their second property within 2 years of the first. This is much sooner than the average 8-10 year gap between single family home buyers.