Michelle shares her house hacking success story from a small multi-family unit in Sacramento, CA.

House Hacking Case Study

As a stay at home mom to young children, house hacking was a big challenge. Michelle and her husband gave up living in their 2,000 square foot home with a pool, backyard, and all of the amenities they desired. At that point, they chose to move their family of 5 into a 900 square foot apartment with another baby on the way.

The goal of this move was to work towards their plan of becoming financially free as soon as possible. With plans to be financially free in five years, this move is a big part of making that a reality. After the couple decided to embrace the concept of delayed gratification, they moved forward with their house hacking adventure.

The House Hack

In June 2020, the couple closed on a triplex in Sacramento. The family moved into one of the three units and planned to rent out the other two.

Updating the Units

Although the property was move-in ready, Michelle plans to repair and paint the exterior. For now, Michelle is collecting estimates from contractors. But she hopes to finalize these repairs in the near future.

The Tenants

Soon after closing on the property, a good friend of Michelle’s needed a place to live. With that fortuitous turn of events, Michelle’s friend was able to move in soon after Michelle’s family moved in. The third unit will be rented out via Airbnb or Furnished Finders soon.

For now, Michelle plans to self-manage the property. With the help of Cozy.co, she is able to manage her tenant easily.

The Numbers of the Deal

It’s time to find out exactly how profitable this house hacking strategy was!

Financing

Michelle and her husband used a conventional loan to put down 20% on this home. With a closing price of $675,000, the down payment required was $135,000. When combined with an interest rate of 3.125%, the monthly payment on this home is $3,100.

Rental Income

Michelle is able to charge $3,250 to rent out the extra units. With that, her family is enjoying a positive cashflow while living for free.

  • Previous housing costs: $2,450
  • Gross Rent: $3,250
  • Mortgage payment: $3,100
  • Cashflow before maintenance and vacancies: $150
  • Total housing savings: $2,600

The cash flow of the property is cashflow positive. Plus, Michelle and her family are able to live for free! Although Michelle and her family plan to stay in this property as long as possible, she says that she would absolutely house hack again!

The Learning Curve

Overall, Michelle has found the house hacking process to be rewarding. She has been able to invest their savings into more cash flowing properties.

Michelle’s advice to anyone considering housing hacking is, “Embrace delayed gratification! We are a family with kids – ages 5, 3, 2, and a soon to be newborn come September. We have a dog & 4 chickens that we brought with us. I say all of this because if we can house hack, so can you! There is no ‘right time’ to better your financial situation, just start figuring out a way to do it. If house hacking has been on your mind, I encourage you to take the leap!”

Get In Touch

If you want to learn more about this successful house hack, then here’s how you can connect with Michelle. She is available via Instagram @lifebydesignfamily.

The Bottom Line

Michelle proves that house hacking with a large family is possible. Although it might require some sacrifices, making progress towards financial freedom is worth it!

If you are interested in creating your own house hacking story, then check out our ultimate guide, listen to our house hacking podcast, or read more case studies for inspiration. You never know how dramatically your life can change through this one choice!

If you choose to pursue a house hack of your own, then please share your story with us! We would love to showcase your success.