Narrowing my focus and about ready to jump in!
My fiance and I have decided it's time to get into real estate! We're new to the Philly area, but I think we've narrowed our focus to a particular region (Brewerytown/Sharswood) and a rough strategy (multifamily house hack). It feels like there is so much working against us right now (recent grad, new job, little money, high prices, high rates, ect.), but we're determined to find a place before 2023 is up.
Thoughts so far:
It seems like the FHA loan route is really the only way we'll be able to get into this market, and based on the numbers I've been running, hopefully some seller help with rate buydowns. Since I'm coming out of grad school, and my fiance is in grad school for a few more years, cash on hand is pretty limited for a down payment and closing costs. I do have a camper van (my current home) that I am considering selling, which would help out quite a bit. Since cash is an issue, it seems like my options are either getting something fairly turn-key, or going the 203k route. I'm not opposed to a rehab at all, but I have heard the 203k deals can be tricky to execute. Still looking into that. Turn-key deals that make sense seem to be harder to find, but I'm liking the idea of a relatively low-maintenance property. We are ok with having to contribute ~$1500/mo while living there to maintain repairs/vacancy/capex as long as the property would still make sense as a pure rental if we were to move out in a few years. Rent trends in the area look promising.
Progress so far:
I've talked with a few realtors, lenders, mortgage brokers, and investors found through BP, and so far the community has been super helpful! I'm waiting on an official job offer letter right now to start figuring out the finance side of things. In the meantime, I'm feverishly analyzing multi-family properties on the MLS to get a feel for this. I've been trying to learn a bit more about real estate investing each day! Some days the outlook has been discouraging, but many have been hopeful. I look forward to finally snagging a property and getting started!
Hey Carson,
You are right on track! Take your time and do not rush it. One of the best benefits of house hacking is the lowered risks compared to a non owner occupied property. By living in the property, you can almost ride out anything. I would definitely recommend you build up your cash reserves prior to jumping in. You do not want some kind of major repair to bankrupt you on day one. Also, you mentioned 203k loans being tricky. While they may be, they will most likely yield the higher overall returns. If you have the opportunity to leverage a 203k loan to acquire an asset, I would HIGHLY recommend it. If I could have done it again, I probably would have leveraged a 203k loan instead of going turnkey.
Lastly, as you mentioned if the property makes sense for when you leave in a few years, that will probably be one of the most important factors when considering a house hack.
Good luck on your journey, you are on your way!
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Real Estate Agent Massachusetts (#9576248) and Connecticut (#RES.0824703)
- Berkshire Hathaway - The Cozzi Team
- Podcast Guest on Show #221
Consider looking into the Philly First Home program: https://www.phila.gov/services...
Quote from @Lan N.:
Consider looking into the Philly First Home program: https://www.phila.gov/services...
Great input Lan. Just realize there are a good amount of restrictions on this, ie you can only utilize this funding on a 1-2 unit, have to own it for 15 years or have to repay the loan, and potentially restrictive income guidelines.
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