Starting out/ House Hacking

[Jessica Sudyn]

Hello BP Community,

First time poster here looking to get started in my REI journey.

My fiancé and I are currently renting, and figure house hacking would be the best way to get started since we are also looking to move out. I have a decent amount in savings and trying to figure out what would work best by weighing the pros and cons.

I would like to find a place that i can add value to, however i would not have enough to do any rehab work right away. I figure an FHA 203k might be the best option however, its my understanding that with FHA loans, PMI won't fall off after 20% equity. Please correct me if I'm wrong.

Another thought i had would be to get a hard money loan for 75% of purchase and rehab then refinance into a conventional. I know this would probably be a bit more on the riskier side. 

My plan is to either use the extra cash not being spent on housing to supercharge my savings and start to BRRRR or house hack another property and start to get some cash flow from the first.

Looking to get opinions on this, also any tips and tricks of RE Investing in general would be greatly appreciated. 

Thank you!

[Daniel McDonald]

I love the house hacking route. I am on my second one in 3 years. I think especially now it's the safest entry point. I think the hard money route is a little too risky for the first property. Renovations can be tricky, especially if you're inexperienced. You're right in the PMI part but you'll probably refi into a conventional at some point anyway so I don't know if you need to be super concerned with that just yet. Always happy to chat about my experience!