Percent Down on First Duplex

[Alexander W Gamache]

I have been preparing to purchase my first duplex and plan to undertake an owner occupation role in one of the two units. I live with my parents and this will be my first housing purchase, and therefore will not be selling a house. I currently have enough money for 20% down on an opportunity but if I decide to take a loan with 20% down my timeframe for a future opportunity seems far in my future as much of my savings will be in this down payment. Now the question is whether or not I try and get a loan such as an FHA loan with a lower down payment so that I will have more cash on hand to save for the next opportunity? Or do I stay away from PMI insurance and put the 20% down and start saving?

Notes: I have credit in the 750 range, the duplex cost in my area is in the $250,000 range, and I have roughly $65,000 saved.

[Chris Mason]

Quote from @Alexander W Gamache:

I have been preparing to purchase my first duplex and plan to undertake an owner occupation role in one of the two units. I live with my parents and this will be my first housing purchase, and therefore will not be selling a house. I currently have enough money for 20% down on an opportunity but if I decide to take a loan with 20% down my timeframe for a future opportunity seems far in my future as much of my savings will be in this down payment. Now the question is whether or not I try and get a loan such as an FHA loan with a lower down payment so that I will have more cash on hand to save for the next opportunity? Or do I stay away from PMI insurance and put the 20% down and start saving?

Notes: I have credit in the 750 range, the duplex cost in my area is in the $250,000 range, and I have roughly $65,000 saved.

FHA is the best for the obvious reasons mentioned, greater leverage in particular, but Realtors discriminate against FHA loans, and the listing agent advising their seller client on which offer to accept does not care about your future plans. That might mean you end up with a less desirable property, eg you get the one that no one else wanted.

So if you want "a" house, plan on FHA. If you want "the" property, plan on conventional.