In short
House hacking in 2025—why it’s not dead, how to adapt to higher prices/rates, and ways to monetize a primary residence (including live-in flips and “rent-by-the-room”/amenity rentals).
Guests
Henry Washington, rental property investor who house hacked using a single-family plus ADU (bought ~2018): lived in the 3-bed/2-bath and rented the 1-bed/1-bath; mortgage ~$1,200–$1,300, rent just under ~$1,000, leaving ~$200–$300 out of pocket.
Key claims
House hacking still builds wealth by reducing housing expense; success comes from saving the difference (not necessarily cash flow). Lending is easier post-2023 (e.g., 5% down for 2–4 units; lenders underwrite rents as income). Buy-box: ensure worst-case affordability if you must rent both units; model rent growth to reach break-even.
Notable examples
Henry’s rent growth (1-bed from ~$800 to ~$1,200; 3-bed from ~$1,400–$1,500 to ~$1,800) while fixed mortgage stays ~$1,200. Live-in flip: renovate via FHA 203k/Homestyle/Choicer/VA renovation, live 2 years to avoid capital gains, sell for large profit to fund a “dream home.”
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOThe Evolution of House Hacking
0:00 to 0:37
Learn about the changing landscape of house hacking in the current market.
“Is the traditional house hacking strategy finally dead?”
Understanding House Hacking
0:56 to 2:15
Discover what house hacking is and why it's still relevant today.
“This is the first time we've ever talked about house hacking.”
The Benefits of House Hacking
2:15 to 3:39
Explore the benefits of house hacking and how it can save you money.
“And this format that we're going into is something we've been testing out over the last couple of weeks, where Henry and I are talking about updates to new strategies.”
Personal Experiences with House Hacking
3:39 to 8:24
Hear personal stories and insights on how house hacking has worked for the hosts.
“I think what people are saying in general about the real estate market is that it's harder to find properties where the numbers make sense at first glance.”
Scaling House Hacking Strategies
8:24 to 12:08
Learn how to scale your house hacking strategy for long-term success.
“So we were saving about$1 ,000 a month or more that we were used to paying in mortgage, and we were just put in a savings account.”
Evolving Debt Products for House Hacking
15:40 to 17:03
Discussion about new loan products making house hacking easier.
“So as you said earlier, housing is more expensive relative to rents.”
Finding Contractors and Market Trends
17:04 to 19:06
Insights on contractor availability and market conditions for house hacking.
“So you can, everybody is pretty familiar now with the FHA 203k loan, which is a loan that allows you to use an FHA loan, but also get money to renovate the property.”
Analyzing Mortgage vs. Rent Costs
19:07 to 20:38
Understanding the long-term benefits of a mortgage compared to rising rents.
“And from a timing perspective, I think this is a great time because inventory is up and we're going into the holiday season, which means buyer demand will go down.”
Financial Considerations for House Hacking
20:39 to 23:01
Key financial strategies to consider when house hacking.
“I mean, if we look at the house hack I talked about that I did, that I still own, when I moved into it, we were renting the one bedroom, I think I said 900.”
Preparing for Uncertainty in Investments
23:02 to 23:51
Advice on preparing for potential financial challenges in house hacking.
“But when you're shopping for these properties, what you want to do is figure out with Wint Growth, how long is it going to take you to get to a point where you're not going to have to cover anymore?”
Show all 17 chapters
Preparing for Uncertainty in Investments
24:20 to 24:38
Advice on preparing for potential financial challenges in house hacking.
“which means you're paying less in taxes this year and keeping more cash in your pocket for your next deal.”
Preparing for Uncertainty in Investments
24:46 to 25:29
Advice on preparing for potential financial challenges in house hacking.
“How about a creamy mocha frappuccino drink?”
Creative House Hacking Strategies
25:35 to 28:00
Exploring various innovative methods to house hack effectively.
“David Henry here talking about house hacking.”
Exploring Alternative House Hacking Strategies
28:00 to 28:50
Learn about various apps and methods to monetize unused space for income.
“You can also use apps like Neighbor, where you can rent out space in your garage or a shed or your driveway, but people just store stuff there and you can make money doing that.”
Understanding the Live-In Flip Method
28:50 to 29:55
Discover the benefits of live-in flipping and tax advantages.
“The other house hacking method is I think the one that you're doing, which is the live-in flip, which is super financially beneficial.”
Overcoming Discomfort for Financial Gain
29:55 to 31:14
Discuss the necessity of discomfort in achieving financial goals through real estate.
“She doesn't even really own rental property.”
The Perception of House Hacking
31:14 to 34:05
Analyze the misconceptions around house hacking and its benefits.
“But before we go, I want your one minute rant to people who say that this is too uncomfortable.”
Transcript
Automatic transcript. May contain errors.0:00Henry Washington:Is the traditional house hacking strategy finally dead? In the past, it was one of the most proven ways to build wealth, but interest rates and home prices are much higher now. Living for free isn't nearly as easy as it was pre-pandemic, and in fact, for most house hackers, it's incredibly difficult to find. So can we declare house hacking dead? No. But the old way, it needs a refresh, and this is the new, better way to house hack in 2025. It still makes you wealthy. It still works with low money down. But only if you make these updates for the 2025 housing market. Today, we're going to show you how.
0:43Henry Washington:Hey, everyone. I'm Dave Meyer, rental property investor and the head of real estate investing here at Bigger Pockets. And with me today on the podcast is my friend, Henry Washington. What's up, man? How are you? Hey, what's up, buddy? I'm doing great. We're talking about something you've never talked about before. This is the first time we've ever talked about house hacking. What is this house hacking you speak of? Oh, well, I'm so glad you asked. For our audience, if you actually haven't heard of house hacking, so when you buy a multifamily property, live in one unit and rent out the others to help cover your living expenses, help generate cash, scale your portfolio.
1:20Henry Washington:You can also do it with the rent by the room strategy, where you buy a single family home, live in one bedroom and rent out the others. both really work. And listen, I'm like joking around with Henry, but we get it. You've heard about house hacking on the show, but you know what? When it stops making you rich and it stops being one of the best strategies to pursue, then we'll stop talking about it. But that hasn't happened yet. So we are going to keep talking about it. It's just a really good way to get into this business. I really just define it as you monetizing your primary residence because it can be a single, it can be a multi, but there's a lot of ways that you can generate income from your primary residence, no matter what kind of primary residence it is.
2:05Henry Washington:I couldn't agree more. And I know there are hordes of people who say that your primary home is not an investment. I think it is completely a choice. And that is what we're going to be talking about here today. And this format that we're going into is something we've been testing out over the last couple of weeks, where Henry and I are talking about updates to new strategies. And if you're watching this on YouTube, listening on Spotify, leave us a comment. Let us know if you like this format. If you want to see more of these kinds of shows, give us ideas for shows. We would love to hear your opinions on that.
2:36Henry Washington:But today we're going deep into house hacking. So Henry, let me just ask you this. Why do you think some people are saying right now that house hacking doesn't work as well as it did in the past? Or maybe they're as dramatic as saying that it is dead. Yeah, I think that's just been like what people are doing with strategies that were really, quote unquote, easy to do a couple of years ago is just saying that they're dead now because it's harder. And I wouldn't even necessarily go as far as to say that house hacking is harder. It's just different. A lot of things have happened over the past couple of years that actually make it more accessible than it was before.
3:15as the common investor is now more savvy to what this is. Lenders have started to pick up on what this is. That's true. There's been changes with lending that allow for this to be easier and less expensive for primary home buyers. Some of the red tape isn't as bad as it was before with some of the loan products. And so I wouldn't necessarily say it's harder to house hack. I think what people are saying in general about the real estate market is that it's harder to find properties where the numbers make sense at first glance.
3:46Henry Washington:All right. So for those of our audience who's maybe newer, doesn't fully understand house hacking and why it's so beneficial, maybe talk to us a little bit, Henry, about, you know, the top benefits that you see. The best benefit is reducing what most people's largest living expense is, and that's typically housing. And so house hacking allows you to reduce that. And in some cases, eliminate that expense because the income you produce through renting out the other units or monetizing the property in some other way typically covers the majority, if not all of your mortgage. And so, you know, I speak about this because I did it.
4:27You know, I bought a single family home with a, with an ADU. And this was back in 2018, I think I bought it. And so we lived in the three bed, two bath house, and we rented out the one bed, one bath house. Our mortgage, I think it was around 1200 or$1 ,300 at the time. And we were able to rent out the one bedroom unit for about just under 1000 bucks a month. And so we had to pay somewhere between two and$300 a month of our mortgage after we brought in that income. Amazing. And prior to us buying and moving into this two family, we lived in a single family where we were paying about$1 ,500 a month with no income.
5:08And so what that allowed us to do, and I think the key to house hacking is this part I'm about to say, it's not the fact that you offset your mortgage. It's what you do with the savings that helps you be successful. And I think that that's the thing people don't talk about. And so what we did was we were used to paying$1 ,500 and we didn't stop paying$1 ,500. We just paid the additional into a savings account because we didn't want to adjust our lifestyle to not have that bill because at some point we are going to have a mortgage again. And I didn't want lifestyle creep to take away from the savings that we were getting.
5:44And so we just banked that money every month so that we could use it as a down payment on the next home.
5:50Henry Washington:That's a perfect explanation of the benefit and why it still works. Because as Henry just showed you, you don't need to cash flow on a house hack to make it work. I think one of the top three, five deals I've ever done was a house hack I lived in. I still paid a little bit out of pocket every month, but I lived in this house for two years and probably similar. I think like, you know, I was living by myself. It's probably two, three hundred. Very similar change. And I saved so much money over that time. It also like happened to correspond with a time where I got my master's degree and my earnings went up and I just could start saving money.
6:30Henry Washington:And like I had bought deals before that. But I think it was like really when I start to see like, oh, I can actually build a portfolio. You know, I'm no longer thinking about like, how do I borrow money or partner with people? It's like, oh, I could just save the money and finance that renovation, or I can save the money up and buy another house hack in the next couple of years. And that was just like a huge unlock. But I want to talk about two other things that I just love about house hacking. Number one, it's just, I feel like it's training wheels if you're starting out. It's a great way to learn how to be a property manager because you're on site.
7:04Henry Washington:You see everything. You learn how systems work in a building. You learn how to take care of the outside of a building. You learn what it's like to manage tenants. And we'll get into this. I also think everyone's so dramatic about managing tenants. But I just think it's an awesome way to learn. And it's not just for new people, but I just wanted to say like that, I think is a really big value. And then the last thing is the older I get, man, I have full circle old person approach to investing. I'm like, how do I save taxes and how do I get stable debt in my life? And like, I love that about house hacking.
7:42Henry Washington:You can get a 30-year fixed rate mortgage on two to four units. That is a dream. Like you can get multiple units, fixed rate debt. It's beautiful. When my wife and I were looking at houses, we looked at two properties where we were going to house hack. I'm 38 years old. Like I would keep doing it. I bought my first house hack 15 years ago. I'd keep doing it. It doesn't stop. Yeah, I know. Like I wound up not doing it because I found what I think will be a better live in flip, right? Because there's just a different, but like, I'm still looking for ways to earn money. off my primary residence. Two things.
8:11A live-in flip is a house hack, in my opinion, because you're monetizing your personal residence. That's true. By your definition, it is. And secondly, technically, I'm still house hacking. Because what we did was we saved up that difference in mortgage payment. So we were saving about$1 ,000 a month or more that we were used to paying in mortgage, and we were just put in a savings account. When we bought the house we live in now, we used that money we saved as our down payment. We rented out the unit we were living in. And then we just take that surplus and we use that surplus as part of our mortgage payment at our new house.
8:43So that duplex is technically covering half of the mortgage payment at my current home.
8:49Henry Washington:That's the gift that keeps on giving. It's brilliant. And then now we've bought 20 acres and we're going to build a home on that. I'm going to have four units. So three Airbnbs and then part of my party barn will have a two bedroom unit in it. those short-term rental units we're going to use to offset the mortgage. Yeah, exactly. It's amazing. And like, again, training wheels, because you're taking care of a short-term rental, sometimes it can be hard taking care of it in your backyard a little bit easier. You know, it just, yeah, it just still, it makes everything just a little bit easier. So, I mean, these are some of the many benefits.
9:25Henry Washington:The other thing I will just mention here is that it is more scalable than people think. Like you can do one of these a year, probably one of the most common ways I see people scale quickly is this one a year house hack strategy. Do you see this, right? I tell people this all the time. I'm like, just think about it for a second. If you are, especially if you're young and single, why wouldn't you buy a duplex a year, live in one unit, rent out the other unit, then after you've been there for six months, start shopping for your next one, do it again on a conventional loan. So you can do an FHA loan for the first one, do a conventional loan for the second one, and then do it again.
10:02And let's just say you did that three times.
10:04Henry Washington:You get six to 12 units. Six to 12 units that you got in with a 5 % down payment. Rents are going to increase over time. Your property value is going to go up over time. And if you never bought another property in 30 years, those things are paid off and they supplement your retirement. That's amazing. Like depending on the properties you do, you pay those off. That could be your retirement. Right. Absolutely. The right 12 units, like the one I was talking about that, the three unit that I used to house hack the one I was talking about before, like to me, in my mind, that's my retirement. Like it generates, I think it's like already right now, 8 ,500 a month in rent.
10:38Henry Washington:I've already owned it for 11 years. So when I pay that off, like the rent's probably going to be 10 grand a month, that one property, right? I bought that. Was I cash flowing? No, but like, it's just, I bought a good deal and I'm holding onto it. This isn't rocket science stuff, but like, It's going to be amazing. You could do that two or three times. Just fundamentally change your entire life. Listen, if you're single or you're married with no kids, you should buy a duplex, triplex, or quadplex a year. And do that every year until you're not single anymore and your spouse says, I will never share walls again.
11:15Just keep doing it. Just keep doing it.
11:17Henry Washington:Yeah. I mean, I don't know if it's me because my mom lives in an apartment. I'm used to apartment buildings. I just don't think it's weird to share walls. It's just a normal thing. There's a lot of places in the country where that's very normal. Yeah, I'm going to throw in one other thing. It's probably the lowest risk real estate investing strategy out there. If you are trying to get in and you don't want to take a lot of risk, buying something that lowers your living expenses is lowering your overall financial risk, even though you're buying an asset. It is lowering your overall risk. And that's an incredible thing, especially in today's day and age.
11:49Henry Washington:It's good hedge against inflation. there's always some risk, but there are very few ways that it can go wrong with house hacking. All right. So now you've heard enough about why we love house hacking so much, but we got to talk about how to update your approach to house hacking in 2025 and how to go out and find great house hacks. We'll get into that right after this break. This week's bigger news is brought to you by the Fundrise Flagship Fund. Invest in private market real estate with the Fundrise Flagship Fund. Check out fundrise.com slash pockets to learn more. Investing in real estate has always been smart, but it hasn't always been simple.
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15:30Henry Washington:Welcome back to the BiggerPockets podcast. me and Henry are here talking about house hacking before we shared our love letters to house hacking. And now we're going to talk a little bit about modern update to how to go about house hacking. So as you said earlier, housing is more expensive relative to rents. It's probably not going to offset as much as your income as it would have a couple of years ago. We should be honest about that. But you also actually said there are ways that it's gotten easier to house hacks, particularly around debt products. Can you tell us more about that? I think it was back in 2023 where Fannie basically came out and said, 5 % down on all two to four units is what will be required going forward.
16:13It used to be you would call around and you'd want 5 % down. And once they found out you were buying a multi, they'd say, no, you have to put 20. They'd laugh at you. That's not the case anymore. It's pretty industry standard now, 5 % down. Also, So lenders know how to underwrite these better. Before, it was difficult to qualify for how much a multifamily was going to cost you because multifamilies would typically cost more than single families. But now they know how to underwrite them and they'll actually consider the rents for the property you're looking to buy as income for you. And that increases the income that you earn, essentially, allowing you to qualify for more.
16:54So it's easier to get approved to do these now. The process is a lot easier now than it was prior to 2023, just to get approved to do these house hacks. And then there's other loan products that are available to you to allow you to buy a house hack. So you can, everybody is pretty familiar now with the FHA 203k loan, which is a loan that allows you to use an FHA loan, but also get money to renovate the property.
17:20Henry Washington:Great product. If you want to do a house hack, yeah. Fannie Mae has its own version, which is a Fannie Mae Homestyle renovation loan. It's a conventional loan, so you'll have to put the 5 % down, but it will allow you to buy the property and make the improvements to the property that will give you money for the improvements. And then Freddie Mac has the Freddie Mac Choicer renovation loan. And then there's a VA renovation loan that will allow you to use a VA loan and give you the money to renovate the property. Now, there's going to be red tape with all of these. You have to find a contractor who's willing to put up with a lot of the hoops that they'll have to jump through in order for you to get the renovation money to pay them.
17:58But again, red tape doesn't mean you shouldn't do it. Red tape just means go find the contractor who's going to work with you through this process. There are contractors that probably specialize in working with people who do these things. You just have to go looking for these people.
18:12Henry Washington:The whole context of this conversation is how to adapt house hacking for 2025, this is a perfect example because we're seeing construction slowing down. And although in some markets, it's still hot, hard to find contractors. I am in the midst of my first time flip right now. And honestly, it hasn't been that hard to find trades and contractors right now. And from everything Henry tells me, James tells me when we're talking on the market, it sounds like it's getting a little easier. Would you say that? Absolutely. So like, this is the kind of thing where, yeah, it's a little bit more expensive, but everything in real estate or investing in general is a trade-off.
18:50Henry Washington:And so, yeah, some things are getting a little harder, but as Henry has really accurately pointed out here, some things are getting easier, loan products being one of them, and maybe availability of contractors who are willing to take on some of these awesome loan products is another benefit of the market that we're in right now. And from a timing perspective, I think this is a great time because inventory is up and we're going into the holiday season, which means buyer demand will go down. And that means that there's more opportunity for someone who is looking to get a property that has some wiggle room in it or that has some distress on it because there's going to be less buyers right now.
19:31And so if you have an opportunity to now go in and start making offers on these properties at lower than what they're asking for and potentially getting that offer accepted. So if you can come in, find yourself a property that has some equity or room in it and then make an offer to them at a price point that makes sense for you and then utilize one of these loan products, you can get yourself a good deal and get the money to renovate the property. You move into a house with some equity and now you're house hacking and you are covering the majority of your mortgage.
20:02Henry Washington:If Henry is saying that this is a good time to go find a house hack, I absolutely believe him. Just like from a macro perspective, it's also a good time to do it because rent's just super expensive. And so it's like when you do the calculation of how much money you're saving, yeah, it's your mortgage is going to be more. That is true. But what you're replacing with that mortgage is also way higher and you're going to fix that mortgage rate, right? So even though your rents could keep going up in the next couple of years, probably will that mortgage rate you're replacing that rent with, that will stay the same.
20:37Henry Washington:And so that does sort of make it another good time to do this because rents, I think they're going to start picking back up in 2026. So it's another reason to do it. I mean, if we look at the house hack I talked about that I did, that I still own, when I moved into it, we were renting the one bedroom, I think I said 900. I think we originally rented it for somewhere around like 800. that one bedroom now rents for$1 ,200. And the three bed, two bath that we were living in when we moved out, I think we rented it for$1 ,400 or$1 ,500. That three bed, two bath now rents for somewhere closer to$1 ,800.
21:13Wow. So we're getting just under three grand or right around three grand a month out of that property. But my mortgage, because we got fixed rate debt, is still$1 ,200.
Read the full transcript
21:22Henry Washington:Still the same. Yep. And that will keep happening as long as you hold on to that property. I agree with you. Inventory is going up. These deals are going to become more abundant. What are some things people should include in their buy box if they're looking for a house hack? So what I would be looking for is something where your living expense is going to be cut down dramatically. So if you can go from paying$2 ,000 a month down to paying$800,$900, $1 ,000 a month, that's a win. You're able to pocket$1 ,000 a month and then use that to save up for your next investment property. You're also saving post-tax money.
22:01Henry Washington:So it's basically the equivalent of saving like$1 ,300 a month. And what you want to look for is, I'm not saying go out and buy a deal because at some point you're going to move out of this property, right? And then you're going to have to rent it out. But when you're doing your research, what you want to be able to do is factor in rent growth over time. So what you want to know is if I have to move out of it tomorrow, is it going to cash flow? No, probably not. Okay. So you need to understand, can I afford to carry this property if things go south and I don't live there for long enough for rents to cover?
22:32Don't put yourself in a terrible financial situation because we don't know. You don't know what the future is going to hold. So if you're buying a property, let's say, and then life happens and you have to move and you have to go rent somewhere and you want to rent this property out, can you afford to cover that property if you have to rent out both units? In other words, if the rent from both units doesn't cover the mortgage, if you're not living in the property, can you cover the difference long-term to hold that property? That's how you protect yourself. It's just, you want to be able to make sure that you can carry that in the worst case scenario.
23:05But when you're shopping for these properties, what you want to do is figure out with Wint Growth, how long is it going to take you to get to a point where you're not going to have to cover anymore? So let's say you buy a property today. And if you had to rent out both units, you would have to come out of pocket three or$400 a month. But if rent growth is going to improve year over year, maybe in two years or three years, that$300 is absorbed by rent growth. And now it's a break even if you have to move out or now you're cash flowing. So you have to look at what is rent growth in that area of town or in that market that you're looking for?
23:42And how long would you have to carry that mortgage if you weren't going to live in that property and you had to move out right away. So you're just preparing to protect yourself if things don't go perfectly.
23:52Henry Washington:All right, we got to take one more quick break. But after this, we're going to talk about ways investors can make their house hacks even more efficient and some different flavors of house hack. As Henry has alluded to, we'll be right back. Tax season reminder for all the real estate investors listening. If you own rental properties, short term rentals, commercial buildings, basically anything that's not your primary residence, you need to know about cost segregation. It's an IRS-compliant strategy that lets you accelerate depreciation on your properties, which means you're paying less in taxes this year and keeping more cash in your pocket for your next deal.
24:30Henry Washington:Cost Segregation Guys is the go-to firm, having done over 12 ,000 of these studies with$500 million in total depreciation identified. Head to costsegregationguys.com slash BP to get a free proposal and see your potential tax savings. Tomorrow morning is knocking. Stock your fridge now. How about a creamy mocha frappuccino drink? Or a sweet vanilla? Smooth caramel, maybe? Or a white chocolate mocha? Whichever you choose, delicious coffee awaits. Find Starbucks frappuccino drinks wherever you buy your groceries. Hi, Ryan Reynolds here for Mint Mobile. Are you looking for a beach read this summer?
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25:34Henry Washington:Welcome back to the BiggerPockets podcast. David Henry here talking about house hacking. Henry, you have sort of opened up the definition of house hacking. You're broadening our horizons here. It's not just small multifamily. You said it's any way you can use your primary residence to improve your financial situation. So what are some other ways? I think the bread and butter classic table stakes is a two to four unit. You live in one, you rent out the others. What are the other things that you think work and do some of them work better, I guess, than the standard approach? Yeah. I mean, I think there's going to be plenty of people listening to this that are like, well, I get it, guys, but I already have my primary residence and it's a single family, so I'm stuck.
26:18That's not true. You can still monetize. Right. And so for the people who are in that boat, ways that you can monetize your primary residence. Now, mind you, this is going to require some level of uncomfortability. Wealth is not built in your comfort zone. If you have a single family and you want to monetize it, you can, but you're going to have to sacrifice some level of comfortability. The more uncomfortable you're willing to get, the more profitable you're going to be. So let's just keep that in mind. So obviously there's the Craig Curlop, just rent out rooms, right? Dude was living in his living room with a curtain up and renting out all the bedrooms.
26:58Super uncomfortable.
26:59Henry Washington:But I will say there's a way to do that one with where you're not living on a couch. Like you could just buy a four bedroom house and have a bedroom, right? Like that is a format of living. I don't know about you. I lived in for 10 years with a roommate, you know, like that's just having a roommate. You're just the landlord for your roommate. Absolutely. That's not that weird. I lived in the master bedroom. I had my own bathroom. We rented out the other two bedrooms. I had roommates. We shared the kitchen, it was fine. Like it's just normal having a roommate. So yes, you can do that and have roommates.
27:31You can use Airbnb and short-term rent a room so that you don't have somebody living there all the time. You can do something a little even more creative. And if you've got like a cool space in your house, maybe you've got an office space that's super cool, or maybe you can curate a cool space. You can use apps like PeerSpace to rent rooms out by the hour for people to come and record content or film commercials. Another thing you can rent out amenities you have. If you have a pool, you can use apps like Swimply to rent out your pool to people who want to come and use your pool by the hour. Nice.
28:03You can also use apps like Neighbor, where you can rent out space in your garage or a shed or your driveway, but people just store stuff there and you can make money doing that. If you've got land or yard space, you can use an app called Sniff Spot, which is basically people renting private dog parks. There are options for you. All of these are things that exist. And if they exist, that means there's people that are using them and making money. So I would encourage you to just do a little bit of research and figure out what are people paying for? Do you have an amenity that somebody might pay to rent or use?
28:42And there's probably a platform or an app that will allow you to bridge the gap between the people looking for those amenities and then you being the person that has that amenity. The other house hacking method is I think the one that you're doing, which is the live-in flip, which is super financially beneficial. So you could go buy a property with an FHA 203K or one of these other loan products we talked about in the previous segment. You could buy the property, you could fix it up, and then you could sell the property and move out of it and do it again. The cool part about it is if you live there for two years, then when you sell that property, you don't have to pay the capital gains taxes.
29:22And you can literally pocket that money and go and do your next one or go and buy another multifamily. The live-in flip, I think, is the house hack people don't really talk about. I will say, I'm doing it
29:34Henry Washington:where we're gonna renovate the house and add equity, but I don't think we're gonna sell it after two years. Like my wife and I are just at a point in our lives where we just probably are going to stay here. But like we bought with that intention. And I think if you are willing to sell and move every two years, which is, again, a level of discomfort for sure, man, you can make a lot of money. Mindy Jensen, the host of the BP Money Show, has been doing this for like 20 years. That's all she does. She doesn't even really own rental property. She just does that over and over and makes tons of money doing it.
30:05Yeah, or think about it from the perspective of like, a lot of people have aspirations to own a big, beautiful home. And a lot of people probably can't quite figure out how to get there from maybe the spot that they're in. Maybe they don't make enough money in their day job to afford that big, beautiful home that they want. And they'd have to get a lot of raises and promotions before they get there. The live in flip method is a way that you could get there because let's say you bought a house under undervalued, you do the FHA 203k, You get a loan, you fix it up, and then you sell it to the point where you're making $100 ,000,$200 ,000,$300 ,000 of profit because you're going to live in it for a couple of years.
30:48It's going to appreciate on top of the fact that you bought it undervalued. And so now you sell that property, you got a couple hundred thousand dollars that you can put down on that dream home.
30:58Henry Washington:It's basically getting the benefit of a 1031 for your primary residence without all the pain in the ass, anxiety, inducing things of a 1031. want. Yeah. You could do a live in flip, live there for two to three years, sell that bad boy and get to your dream home a lot faster. All right. We do have to get out of here in just a minute, Henry. But before we go, I want your one minute rant to people who say that this is too uncomfortable. You just talked about this, but like, what is your response to that? Why are you here? Most people are here because they're looking for a way to build some level of wealth.
31:31Wealth isn't built in your comfort zone. You're going to have to get uncomfortable at some point. Dave has rental properties and has done real estate deals that were probably put him in a position where he felt a little uncomfortable.
31:45Henry Washington:I lived in my friend's grandma's basement for three years. That uncomfortability has led him to wealth building. I have done things that were uncomfortable, but that uncomfortability has led to wealth building. If you think you're going to achieve wealth or financial freedom without getting uncomfortable, I've got bad news for you. You're probably not going to get there. Now, I'm not saying you've got to get so uncomfortable that you're not going to enjoy your life. I've enjoyed my wealth building process, but it's required me to get uncomfortable. There's a line. You've got to figure out where that line is for you, where your line of uncomfortability is, and where that is, you can start to build some wealth.
32:29When we went to First House Hack, I told you I bought a 3-2 and then I had a 1-1 ADU. I tried to get my wife to have us live in the one bedroom so that we could rent the three bedroom because we would be able to save more money because we'd bring in more money that way. That was too much. And that was too uncomfortable for her. And she said, that was the line.
32:50Henry Washington:Fine. I'm not going to live in the one bedroom. We're going to have to live in the 3-2, which means we'll build wealth a little more slowly. That's what we did. We had to figure out where that line of uncomfortability is versus profit. I love this. I get to be the optimist here. I get to give the good news. I feel like I'm always reminding people about risk and all this kind of stuff. But Henry is right. There is some level of discomfort in this. But the good news is it's really not that uncomfortable. It's not that bad. In the grand scheme of things, it's really, I think it's pretty dramatic how people react to house hacking.
33:26Henry Washington:They're like, Like, oh my God, I have to share a wall. It's like, of course you do. Like, you've never lived in an apartment? Like, you've never had a roommate? I don't know if you know this, but that wall's not see-through. Exactly. You can close the door if you want to. Like, it's totally up to you. So I just think like, man, on the spectrum of discomfort to opportunity, house hacking is like truly the best. Like, I still think even though there's like this little bit of discomfort, The upside is so big. It's just like I think it's so overblown that this is hard to do. It's not. It's a gift.
34:04Henry Washington:The fact that you can do this, the fact that you can buy a four-unit putting 3.5 % down with fixed rate debt is one of the best investments in the world. It truly is. Other countries don't have that. This is incredible. You should go do it. Amen. All right. I'm sweating now. I'm crying. I need to go. I like Dave Rantz. Dave Rantz are my new favorite thing. I know. All right. Well, thank you for being here, Henry. Thank you all so much for listening to this. I think that this was a lot of fun. As you can tell, we're both really passionate about this. Genuinely think it's a great option. If you like this show, please give us a comment.
34:44Henry Washington:Share it with a friend who needs to hear this. We would really appreciate that as well. Henry, good seeing you, man. You as well, man. And thank you all for listening. We'll see you next time.
From the publisher
House hacking is still the easiest way to start investing in real estate—and it’s getting even easier. You no longer need to live with roommates, share spaces with tenants, and give up your home to offset your mortgage. Instead, thanks to some new methods, you may not even need to live with or next to a tenant at all. These “house hacking” methods still make you rich, still save you tons of money, and work in 2025. In fact, they’re so good, Dave and Henry are doing them right now, even in their 30s and 40s, even with spouses and kids!
So what is house hacking? House hacking is when you rent out a portion of the space in or on your property to offset your mortgage cost. This could be renting out one unit in a duplex while you live in the other, or renting out a bedroom in a single-family home. While those are the more “traditional” ways to house hack, there are new tactics that still make you money every month without giving up your personal space. We’re talking about renting out garages, extra land, swimming pools, and more.
Plus, new house hacking loans allow you to put even less money down on your next property so that you can get in with little money down, have other people pay most of your mortgage, and use the savings to build your passive income streams faster. It’s made us wealthy, and thousands of other investors, too. So, when are you going to start house hacking?
In This Episode We Cover
Why house hacking is the easiest way to get started in real estate in 2025
How to house hack without having roommates (multiple methods)
New 5% down loans you can use for single-family AND multifamily rentals
Alternatives to renting rooms/units (renting swimming pools, garage space, office space, land, etc.)
Why Fall 2025 may be an even easier time to get your first house hack (buyers in control!)
Henry’s new home that he’s personally designed for house hacking (you’ll want to live there)
And So Much More!
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1182
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