House hacking represents one of the most powerful wealth-building strategies available to new real estate investors. By purchasing a property, living in one unit, and renting the others, investors can significantly reduce or eliminate their housing expenses while building equity.
Financial Advantages
Consider a $400,000 fourplex with a 5% FHA loan requiring just $20,000 down. If three units rent for $1,500 each ($4,500 total) and your mortgage payment is $2,500, you're living for free with $2,000 monthly cash flow.
Scaling Your Portfolio
After 12 months, repeat the process. Many investors build portfolios of 3-5 properties in 3-5 years using this strategy, eventually moving to a separate residence while their rental portfolio generates substantial passive income.