Business
Everyone has heard of house hacking a multifamily property. But can you house-hack a single-family?Absolutely! In fact, it can be better with a single family.Zach, a recent Marshall University graduate, purchased a foreclosed property for a very low price in a nicer neighborhood. With the help of a contractor and a lot of sweat equity, Zach rehabbed the home for quite a low amount of money. Zach ended up creating about 100K in equity! His plan is to live in the property for 2 years and rent out 2 bedrooms to his friends. Learn some of the ins and outs of foreclosures.Learn how to avoid taxes on profit completely (Besides 1031 tax free exchange)Learn different types of mortgages Biggest lesson learned:"Grow some balls and do it!"Pros of SFH house hack:- Home Sales Exclusion: Tax Free profits. Can exclude up to 250K in profits from the sale of a home if the owner lives in the property for 2 years. - Still be able to rent bedrooms. - Despite living in 1 bedroom, the current market rent is 2/3 of the rent if Zach was not living there. - Split utilities - Can cash flow better if rooms are rentedCons of Multi-family house hack:- Only the unit the owner lives in can be used under the Home Sales Exclusion Act- Have to pay own utilities