The "House Hacking" Hurdle That No One's Talking About
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- Äas pĆidĂĄn 27. 07. 2024
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For most first-timers, the reason we choose to house hack is because we donât have loads of up-front capital to make a large down payment on a property. The fact that an FHA loan will allow you to utilize their 3.5% down on up to 4 units is exactly what attracted me, and many of us, to house hacking in the first place.
But, little did I know!
If you are going to have a non-occupant co-signer who helps you qualify for your 2-4 unit property, you may not be able to take advantage of that 3.5% down, but instead, be required to put down a whopping 25%.
In this video, I discuss how I temporarily converted my duplex into a single family home in-order to qualify for the 3.5% down payment.
If youâre interested in house hacking, or real estate investing in general, check out the links below.
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More videos you might enjoy:
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Comparing FHA and Conventional Loans: www.nerdwallet.com/article/mo...
Down payment assistance programs: www.hsh.com/homebuyer/dpa-gui...
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Thanks for making this video. Its rare to find real, helpful, and to the point advice without someone trying to sell you something. Just subscribed and Looking forward to more content
Thanks so much!
I'm so glad I'm a vet and get zero down.
Iâm So Happy My Mom & Dad Made Good Investments So Credit Really Donât Matter I Paid Cash For My First 2 Properties Smart Guy!!!
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Isnât the point to leverage a low down payment to get an exponential return off that
Nicely done, Lili! :) Good details to know. I have a couple rental condos too and just hit the Net Zero monthly housing costs across all three properties now. Income from the two condos pay for all three units condo & hoa fees and property taxes plus a small second mortgage payment on the third property.
This is great information! Congrats on your first House Hack. If for some reason you were unable to get the FHA board to accept as a single-family and decided to move forward with the purchase at 25% down, changing financing to a conventional loan could be an option to explore to minimize the closing costs:)
Super interesting! Thanks for sharing your insights⊠Good luck on your investing journey!
Congratulations!! Well done, plus an excellent explanation!!
I didnât know u could have a co-signer for an FHA loan. Thatâs so helpful!
So glad it worked out. Sounds like u have amazing folks since they were open to helping to co-sign that is incredibly rare
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Is it really rare for parents in the US to assist their child in obtaining a property? Most parents I know would help without question.
@@hellow4130 if they can afford it, itâs not uncommon to help. Itâs just that a lot cannot afford to help after already helping with school
@@GradyCool Thatâs understandable.
That's such crazy! I can't believe they made you do that to the property like that, several SF homes have multiple kitchens. Glad it worked out in the end!
It can be a crazy process!
Recently found your channel. I'm a fan! Subscribed.
Extremely informative!! Thank you
Didn't know or consider you can reclassify a duplex (or other) back to single family. Very good to know since down the line a SFH will probably be easier to sell than a multifamily.
Also don't feel bad about 90 days. To refinance our mortgage we went through a 5+ month process because of tiny details that took forever to fix...
That's a really good point about the resell, and yesss sometimes these things move so slowly. Thanks for watching and commenting :)
Asking questions really helps you out a lot! Always ask!
When we bought our duplex, we were able to get it for less than 25% down if we were living in it.
Facts! It is way harder than it seems. I'm experiencing some headaches currently.
All part of the game right! Keep pushing!
Will you share some of your headaches?
HardWorkPays0ff Mainly vacancy and Rats. I have a video on my page that talks about it and how to navigate that.
Thanks for the insight! Good info
Did not think of this, thank you! Just realized that I might be needing a co-signer as well haha
Thank you for sharing your experience!
Thanks for watching!
This literally happened to me too!! Awesome information, i really like your channel! just subbed đđ
Thanks so much for subscribing Chris! Good luck on your investing journey, as well :)
Awesome! Thanks for the information!
Thank you for pointing this.
Absolutely, thanks for watching and supporting :)
After watching this video I just had to subscribe! Bless up
Thank you sooo much :)
Super helpful. Thanks for sharing!
Absolutely, thanks for watching :)
I like all the insights you gave in this video about your experience with house hacks.
If anyone is looking for more personal experiences, I posted a video on the same subject earlier today talking about my current hunt to find a house hack and why I chose to do it.
You probably could have went with a conventional 5% down loan and skipped the FHA review board đ€
...fair point lol
Where can you get 5% down for duplex?
@@DmitryMalinkin Shop around hard, even use out of state lenders.
Conventional owner occupied duplex is 15%
@@hfarthingt as long as you arenât using a co-signer, I believe you can qualify for 1-4 units with as low as a 5% conventional loan
that down payment assistance may have just been a game changer for me! thanks!
Absolutely! It was so nice showing up at closing and seeing a check with my name on it from the state :) Good luck with your REI journey!
@@Liliinvests in New Jersey you have to live in the building for 5 years for the loan to be forgiven
What a hassle. Glad you got the deal done! Thanks so much for sharing
Lol thank goodness it was worth it. Thanks for the support!
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I'm wondering about the legal requirements around renting a duplex that's officially a single family... I'm also worried about unpermitted additions. I'm having a hard time finding any down payment assistance that allows multifamily properties. Thanks for this useful video about your experience!
Its been a while since this comment, but did you ever end up figuring out how to get the financing to work on a fha on a duplex?
True inspiration... I made up my mind that Iâm moving forward with this process next year... any tips for finding a good realtor?
Thanks so much for watching and commenting, I'm excited for your journey! I believe you can search for realtors in your area on BiggerPockets, but whoever you work with I'd make sure they've worked with investors in the past and that they set you up with automatic email alerts.
No one talks about this because it's really rare.
this was super helpful thank you!
Thanks so much for watching and commenting :)
What a headache, thanks for sharing your experience.
It's good information for people to understand that buying a duplex may require a higher down payment. Unfortunately she didn't mention the biggest unforseen hurdle that house hackers really have, and she may have made it worse for herself by changing from a duplex to an ordinary single family home. Many counties have zoning ordinances for Single 'Family' houses, and if you look into the definition of 'Family' in their ordinances it will say something like "blood related OR no more than X unrelated people', and sometimes X can be as low as 3! So if you need to have multiple unrelated renters living in the same single family house, all it takes is for one of your neighbors to get irritated with you for any reason (like parking) and they will call the county on you and DESTROY your ability to rent out rooms.
That's definitely one of the things you have to research before buying. I made sure I was all good to go :) thanks for watching
Thank you for sharing! & congrats on your house hack
Thanks so much for watching!
How did you find your property/seller? MLS or other?
Great video, subbed
Wow thanks I am starting my journey.
Best of luck!
What are the requirements a bank or realtor ask for while buying a multi property for witch you will use to house hack also should you share that information let's say the property since I live in Los Angeles California is being sold for 650,000 Dollars
Wait. Just to be clear. You separated the utilities, restored the kitchen, and created a true duplex after the deal went through right?
I was just going to ask the same thing lol!
I was wondering the same thing but I doubt she would want to answer that here.
Thank you!
You bet!
Hi, Lili. Can I use the down payment assistant and also put my money towards the down payment too?
Interesting. Thanks Iâm new here but Iâm planning on staying đ
I appreciate that!
Great video, young black excellence đ
Thanks for the support Tevin :)
@@Liliinvests You're Welcome, continue to do great things đđ
This might be a silly questions, but I'm just learning more about real estate. How can you do work on a house (combining the electric and converting kitchen) if you didn't buy it yet?
Glad I found your channel! Thanks
Great question! đ€
Great video
Good info. Thanks.
Glad it was helpful!
Most definitely
Are the requirements for the owner occupied co signer the same as any other co signer? in other words do they have to make a certain amount of money and have A1 credit? I ask because I will have to be strategic about who I ask and find someone that will be willing to help me and I need to know who to target. Is there a link with more information on that?
To be considered house hacking you must live there and if u live there u will have no problem getting FHA. This sounds more like u had trouble getting a rental property with FHA and thatâs normal.
I was confused about this as well
Hello lili , Is the mortgage determined based on the property price the same for a single family vs a duplex or triplex?
But you canât sell or refinance the house for 7 years if you use down payment assistance or you have to pay it back, correct? At least thatâs what it says in Ohio
what was your credit score at that time?
I think you could have done a Freddie mac conventional loan with a non occupant co borrower for the multi family property and still kept it 3% down
Definitely a good point! I can't quite remember, but I think the FHA at 3.5% had a lower interest rate than the conventional. Thanks for watching and commenting :)
Have you done that kind of thing yourself?
What did you mean when your parents helps boost your debt to income ratio? What is you donât have debt? Will that effect you negatively?
The other way around, she needed more income to qualify for the amount that she wanted to borrow
so wait, upstairs doesnât have a stove??
This is great advice
Thanks for watching and commenting :)
Most definitely
You genius, you!!!!đ€©
Can you house hack townhouses? Will some HOA 's allow it?
Thank you! âïž
No worries!
Quick question, if I were to try to buy a property that is zoned as a multi family and not single family to house hack and I plan on not having a co-signer would fha still require me to put a bigger down payment instead of the 3.5%?
I am wondering the same thing? Or could she have had tenants ready to sign?
Great question. If there's no co-signer, you should still be able to put down 3.5% as long as there are 4 units are less. The issue comes in when you have a co-signer on a multifamily. Hope that helps, thanks for watching!
Yeah you actually answered my question in another video of yours I watched... great content btw keep it up
@@chrishodge3182 Glad I was able to get you an answer. Thanks again for the support :)
Ok earrings! Great info.
Lol OOOkay
I thought you can still put a 3.5 down on a fha loan even on a multi family
Can I house hack a triplex garage?
Was that fha thing state law
Can't you just say your parents will be occupying ? (Unless they have an existing FHA loan)
I dont understand the secret no one is telling you?The flaw clearly came in with not knowing the differences in specifications before purchase.If someone could maybe assist and clear this up thatd be great
Isn't FHA loans good to up to 4 units ?
Yep sure is
Never knew that
Did you put any of your own money into the down payment even though you took the down payment assistance?
Hi Victor! I put about 3% towards closing costs and saved what I would've used for a down payment to hold as reserves for repairs and vacancies. Thanks for watching!
Thank you for sharing that! Iâm looking to do just that but I wasnât sure if it was a good thing to do as everyone say put at least something as a down payment. But I want to use that money for reserves until I find good renters.
@@victorespiritu3431 True, it makes your monthly payment higher if you put $0 down. But since you're using DPA, they are putting the money down for you so to speak. Best of luck!
@@Liliinvests I was informed that I wouldn't qualify for DPA if I was using the house as an investment property. Don't you have to stay there for 2year before you can move? Thanks!
@@Phyllisdaven1234 You have to live there for one year using an FHA loan and DPA. What type of loan were you trying to use?
Wait so if you bought a single family house using the fha your mom wouldn't have to live in the same property?
She's a non-occupying co-borrower, so nope. Thanks for watching :)
Killer deal đđđ
Most definitely
Shouldâve told the lender it was a duplex at the beginning. This is not a âhurdleâ
Never ask your parents to co sign anything for you. Smh
Reason?
@@Liliinvests cuz if you can't pay it, not meaning you in specific, they will be f ed. Not a good look especially if one has aging parents.
It can go so badly
The county is king
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The house hacking method means you live in one of the units. therefore would only pay 3.5% not 25%
I already knew this lol... nothing in life is easy
So you basically just didn't do enough homework and dig deep enough before going through?
That's usually always the case in real estate. Something always seem to come up. Its all about figuring it out. She's doing a whole lot better than 99% of people looking into real estate.
Haha I appreciate that :) Thanks for watching!