For anyone looking to get started in real estate but not quite sure how... House hacking is the best way to begin. At the beginning of your journey you won't have the money needed for a 20% down on a investment property. With a strategy called house hacking you will be able to own your first property without a large stack of cash. Combining this strategy with an FHA 3.5% down payment will work wonders for you.
House hacking is when you purchase a property with the intent to live in it and rent out the other rooms or units on the property. You will also be able to receive a lower down payment from a lender since you will be occupying the property.
You will be living with other people in the property. However, you will get to select them. This could be anyone from a friend or someone random on the internet. Either way make sure you trust them enough to be roommates and look to do a background or credit check before selecting. If you're not wanting a roommate then try finding a property with two units so you can have your own space.
House Hacking Benefits:
1) Low Down Payment - Primary Mortgage Insurance will be required if under 20% so make sure your numbers cover this
2) Low or no rent for you! By renting out the rooms you can use that income to pay off your mortgage and any other expenses that come from owning the property
3) Property Management Experience - This is great to give you your first intro to what managing your own real estate properties and dealing with tenants is like.
4) Someone else is paying down your mortgage and possibly giving you cash flow while you live in it
5) You ideally would look to repeat this and when you do you can rent out your spot in the property with a paying tenant, allowing for more cash flow.
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