Homeowner · Danvers, MA · Member since 2021 · 30 posts · 18 votes
I live in an expensive area. Specifically, I'm house hacking a 2bed/1bath condo (living in one bedroom and renting out the other). I don't have enough cash to purchase a house hack without selling my condo. I have about $10K in savings, and if I sell my condo, I'll net about $30-40K. Average price for a SMF in this area is $500-600K.
The part that scares me the most is if I sell my condo and my offer on a new SMF doesn't get accepted, I could be in limbo. Not to mention, not sure what I would do with my roommate if things didn't pan out. Also, if I do get a SMF, I won't be able to pay the mortgage on my own. I'd have to rely on tenants because I don't make enough to cover the mortgage on a SMF in this area.
My question is, would you take the chance of selling your primary to have enough funds to [hopefully] get an offer accepted and buy another property?
Rental Property Investor · Minneapolis, MN · Member since 2016 · 214 posts · 132 votes
4y
@Nico Dandini
Is a smf a small multi family? If you can get approved for the loan, I’d ditch your condo and make the jump. The lender will likely factor at least partial rents of the other units into the underwriting, so that should help.
I also don’t care for condos and hoas though, so take my bias into account.
Homeowner · Danvers, MA · Member since 2021 · 30 posts · 18 votes
4y
@Marc Starkman I've thought of keeping my condo and investing out-of-state, but I'd have to save more money before I can do that. I figured selling the condo, putting down 3.5%, and house hacking in my local area would be the next fastest step. I guess what I really want to know if the thought process above sounds like a dumb or too risky move.
Rental Property Investor · Minneapolis, MN · Member since 2016 · 214 posts · 132 votes
4y
@Nico Dandini
Is a smf a small multi family? If you can get approved for the loan, I’d ditch your condo and make the jump. The lender will likely factor at least partial rents of the other units into the underwriting, so that should help.
I also don’t care for condos and hoas though, so take my bias into account.
Homeowner · Danvers, MA · Member since 2021 · 30 posts · 18 votes
4y
@Danielle Jackson It's funny. I just found a decent one last night. Duplex, over $200/mo cashflow, 18% return.
However, before that, deals were more like -$500-1000+ for cashflow. So in some cases, my housing expenses would be less. Other times, it would be about the same as what I'm paying now, but there's be more equity.