Everyone comes up with excuses. Why you can't lose weight, why you don't have enough time, why you're always broke. The same goes for anyone who considers getting started with real estate investing. Some common excuses are "I don't have enough money", "I don't want to deal with midnight calls about toilets" or simply "I don't even know where to start". Stop making excuses and jump in. This article will introduce you to a method called "House Hacking". One of the best ways to get your foot in the door as a real estate investor and start down the path to truly passive income.
WHAT IS HOUSE HACKING?
Simply put, House Hacking starts by purchasing a property and moving into it. This property can be anything from a condo to a multi-unit building (Fun tip: you can buy up to a 4-unit building for as low as 3.5% down!). Once you have purchased the property you follow these steps:
1. Rent out extra bedrooms or other units (renting bedrooms is not necessary if you don't want roommates).
2. Live in property for at least 1 year.
3. Save up new down payment (at least 3.5% down).
4. Find new property to purchase.
5. Purchase and move to new property.
6. Rent out previous property for cashflow!
Now of course the steps seem simple, but that's the point. If you overthink the process then you'll never take the steps to make it happen. In reality there are some extra details that I don't mention, but they are not important for now. The point of this article is to get you motivated to make steps towards your easier living future.
HOW DO BUY THESE PROPERTIES?
Buying your first property is not as hard as it seems. There is this false understanding with many people that you need a 20% down payment to buy a home (ex. home price $200,000 = $40,000 down payment). This is a false understanding. If you buy a home to live in you can purchase it for as little as 3% down or even less in some cases. Using the example above that means you only need $6,000. That's $34,000 less than many people think!
DO I HAVE YOUR INTEREST?
Over the following series of House Hacking articles I will cover the process in detail and how you can become a successful real estate investor for a lot less than you thought.