Own 1 rental in Providence w/ equity - what should my next move be?
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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votesdefinitely house hack. if you have to, expand your search radius. look at lots of properties and make lots of offers.
as you noted, the point of a house hack is to build equity. ideally it gets at least close to break even when you move out and it's fully rented. you will have to run those numbers and decide for yourself what is adequate.
hope this helps
13 Replies
- 9moNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
definitely house hack. if you have to, expand your search radius. look at lots of properties and make lots of offers.
as you noted, the point of a house hack is to build equity. ideally it gets at least close to break even when you move out and it's fully rented. you will have to run those numbers and decide for yourself what is adequate.
hope this helps
Quote from @Nicholas L.:
definitely house hack. if you have to, expand your search radius. look at lots of properties and make lots of offers.
as you noted, the point of a house hack is to build equity. ideally it gets at least close to break even when you move out and it's fully rented. you will have to run those numbers and decide for yourself what is adequate.
hope this helps
Thank you, this is very helpful. When it comes to using cash vs. tapping equity for the down payment on a second property, is one approach generally favored, or does it mostly come down to deal numbers, timing, and available reserves?
- Investor · NC · Member since 2022 · 18 posts · 10 votes9mo
Xander, you’re in a really strong spot for 25 — low housing costs, solid income, and already owning a rental...is a big deal.
One thing to consider alongside the FHA multifamily idea: if you're open to roommates, another single-family or lighter house hack could be a simpler next move than taking on a $600k–$800k property with higher debt and maintenance (those 3-level buildings are big lol).
The other angle you might want to consider is income growth. Given your age, even modest increases in earning power over the next couple of years can completely change what deals pencil, your financing options, and how much risk you have to take on. Real estate will still be there — and you’re already in the game.
Just my two cents, but you’ve got a lot of good options :)
Quote from @Sabrina Speights:
Xander, you’re in a really strong spot for 25 — low housing costs, solid income, and already owning a rental...is a big deal.
One thing to consider alongside the FHA multifamily idea: if you're open to roommates, another single-family or lighter house hack could be a simpler next move than taking on a $600k–$800k property with higher debt and maintenance (those 3-level buildings are big lol).
The other angle you might want to consider is income growth. Given your age, even modest increases in earning power over the next couple of years can completely change what deals pencil, your financing options, and how much risk you have to take on. Real estate will still be there — and you’re already in the game.
Just my two cents, but you’ve got a lot of good options :)
Thank you for your advice, I am working on career growth as well. I'm open to whatever sets me up in the future best, so all these points are helpful.
Is there a preference on tapping equity vs. saving cash for the fha downpayment on the second property?
- 9moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
I would house hack if you can. You'll likely need to do a combination of medium term rental, short term rental, and rent by the room to really make the numbers work. The goal is to reduce what you spend on housing on a normalized basis (I.e. when not living with family and having your own place) while living there and cash flowing on the back end.
Brick House CPAs53 ReviewsQuote from @Aaron Zimmerman:
I would house hack if you can. You'll likely need to do a combination of medium term rental, short term rental, and rent by the room to really make the numbers work. The goal is to reduce what you spend on housing on a normalized basis (I.e. when not living with family and having your own place) while living there and cash flowing on the back end.
Thank you, this makes sense and looks like it will likely be my next move. I'm deciding on whether I should save up the cash personally for the downpayment, tap into equity, or a mix of both.
- 9moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
@Xander Monge I'd look to save more personally. You may be able to get a heloc but You'll need to pay fees on that to get one or if you did a cash out refinance on the existing property, there's closing costs.
Also - you're generally taking on more debt so you're leveraging yourself more.
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- 9moRyan SpathBusiness MemberReal Estate Agent · Boise, ID · Member since 2017 · 598 posts · 382 votes
Xander — first off, huge congrats on already owning a rental at 25 and thinking this strategically. You’re way ahead of the curve. If you can consistently acquire a solid property every couple of years, you’ll almost certainly wake up with a meaningful portfolio in 10–15 years.
To your question: yes, a small multifamily with an owner-occupant strategy can absolutely make sense in your situation — even if it doesn’t look amazing on paper day one.
For reference, I ran some rough numbers on a Providence triplex I saw recently:
8 Andem St, Providence, RI
Asking price: $525,000If you were able to purchase something similar using an FHA loan with 3.5% down, here’s what that might look like:
-
Estimated PITI (including MIP): ~$3,680/month
-
Assumes ~5.5% rate (just a placeholder — local lenders can dial this in)
-
I plugged in $2,500/year for insurance as a rough estimate (definitely confirm locally)
Looking at current rentals, 2 bed / 1 bath units in that area appear to rent around ~$1,600/month. If you lived in one unit and rented the other two at ~$1,600 each:
-
Rental income from other units: ~$3,200/month
-
Your out-of-pocket housing cost: ~$1,000/month
That’s not “cash-flow positive,” but you’d be locking in housing, building equity, and controlling a triplex for roughly what many people pay to rent a single apartment.
The bigger win comes after you move out.
Once all three units are rented:
-
Gross rents: ~$4,800/month
-
Mortgage: ~$3,680/month
After factoring in:
-
8% management
-
8% maintenance / CapEx
-
4% vacancy
-
~$100/month lawn care
The property still roughly breaks even to slightly positive (~$50–$60/month). More importantly, it stands on its own without you subsidizing it — which is exactly what you want as you move on to the next deal.
Bottom line: owner-occupant multifamily deals often don’t look sexy upfront, but they can be incredible springboards. They allow you to control more doors early, keep your living costs down, and position yourself for stronger cash-flowing deals later once equity and income stack.
If you want, I’m happy to share the Excel model I use so you can plug in Providence-specific numbers, or answer questions — just DM me your email. Best of luck, you’re thinking about this the right way.
Quote from @Ryan Spath:
Xander — first off, huge congrats on already owning a rental at 25 and thinking this strategically. You’re way ahead of the curve. If you can consistently acquire a solid property every couple of years, you’ll almost certainly wake up with a meaningful portfolio in 10–15 years.
To your question: yes, a small multifamily with an owner-occupant strategy can absolutely make sense in your situation — even if it doesn’t look amazing on paper day one.
For reference, I ran some rough numbers on a Providence triplex I saw recently:
8 Andem St, Providence, RI
Asking price: $525,000If you were able to purchase something similar using an FHA loan with 3.5% down, here’s what that might look like:
-
Estimated PITI (including MIP): ~$3,680/month
-
Assumes ~5.5% rate (just a placeholder — local lenders can dial this in)
-
I plugged in $2,500/year for insurance as a rough estimate (definitely confirm locally)
Looking at current rentals, 2 bed / 1 bath units in that area appear to rent around ~$1,600/month. If you lived in one unit and rented the other two at ~$1,600 each:
-
Rental income from other units: ~$3,200/month
-
Your out-of-pocket housing cost: ~$1,000/month
That’s not “cash-flow positive,” but you’d be locking in housing, building equity, and controlling a triplex for roughly what many people pay to rent a single apartment.
The bigger win comes after you move out.
Once all three units are rented:
-
Gross rents: ~$4,800/month
-
Mortgage: ~$3,680/month
After factoring in:
-
8% management
-
8% maintenance / CapEx
-
4% vacancy
-
~$100/month lawn care
The property still roughly breaks even to slightly positive (~$50–$60/month). More importantly, it stands on its own without you subsidizing it — which is exactly what you want as you move on to the next deal.
Bottom line: owner-occupant multifamily deals often don’t look sexy upfront, but they can be incredible springboards. They allow you to control more doors early, keep your living costs down, and position yourself for stronger cash-flowing deals later once equity and income stack.
If you want, I’m happy to share the Excel model I use so you can plug in Providence-specific numbers, or answer questions — just DM me your email. Best of luck, you’re thinking about this the right way.
Thank you for all of this helpful information. It seems house hacking will likely be my next move. Would I be better of saving for the downpayment or tapping into equity for it - or does it simply depend on the timing and deal?
-
- 9moRyan SpathBusiness MemberReal Estate Agent · Boise, ID · Member since 2017 · 598 posts · 382 votes
Quote from @Xander Monge:
Quote from @Ryan Spath:
Xander — first off, huge congrats on already owning a rental at 25 and thinking this strategically. You’re way ahead of the curve. If you can consistently acquire a solid property every couple of years, you’ll almost certainly wake up with a meaningful portfolio in 10–15 years.
To your question: yes, a small multifamily with an owner-occupant strategy can absolutely make sense in your situation — even if it doesn’t look amazing on paper day one.
For reference, I ran some rough numbers on a Providence triplex I saw recently:
8 Andem St, Providence, RI
Asking price: $525,000If you were able to purchase something similar using an FHA loan with 3.5% down, here’s what that might look like:
-
Estimated PITI (including MIP): ~$3,680/month
-
Assumes ~5.5% rate (just a placeholder — local lenders can dial this in)
-
I plugged in $2,500/year for insurance as a rough estimate (definitely confirm locally)
Looking at current rentals, 2 bed / 1 bath units in that area appear to rent around ~$1,600/month. If you lived in one unit and rented the other two at ~$1,600 each:
-
Rental income from other units: ~$3,200/month
-
Your out-of-pocket housing cost: ~$1,000/month
That’s not “cash-flow positive,” but you’d be locking in housing, building equity, and controlling a triplex for roughly what many people pay to rent a single apartment.
The bigger win comes after you move out.
Once all three units are rented:
-
Gross rents: ~$4,800/month
-
Mortgage: ~$3,680/month
After factoring in:
-
8% management
-
8% maintenance / CapEx
-
4% vacancy
-
~$100/month lawn care
The property still roughly breaks even to slightly positive (~$50–$60/month). More importantly, it stands on its own without you subsidizing it — which is exactly what you want as you move on to the next deal.
Bottom line: owner-occupant multifamily deals often don’t look sexy upfront, but they can be incredible springboards. They allow you to control more doors early, keep your living costs down, and position yourself for stronger cash-flowing deals later once equity and income stack.
If you want, I’m happy to share the Excel model I use so you can plug in Providence-specific numbers, or answer questions — just DM me your email. Best of luck, you’re thinking about this the right way.
Thank you for all of this helpful information. It seems house hacking will likely be my next move. Would I be better of saving for the downpayment or tapping into equity for it - or does it simply depend on the timing and deal?
Great question — and honestly, this is one of those “it depends” answers, but I’ll share how I’d personally think about it.
Based on what you shared earlier (the property renting for ~$3,200 with a ~$2,895 mortgage), I’d lean toward saving for the next down payment rather than pulling equity right now. A cash-out refinance would almost certainly increase your payment, and there’s a good chance it would wipe out what little cash flow the property currently has — which can limit flexibility and increase risk early on.
That doesn’t mean tapping equity is wrong — it can absolutely make sense in the right deal, at the right time, especially once rents grow or rates shift. I just tend to be more conservative early on and like keeping my first properties stable and boring while building liquidity for the next move.
Either way, I'd strongly recommend running real numbers with a trusted lender so you can see both scenarios side-by-side with current rates, PMI/MIP, and reserves factored in. That clarity alone usually makes the decision pretty obvious.
Do you already have a lender you’ve worked with and trust, or would you like me to make an introduction to someone investor-friendly?
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- 9moTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
@Xander Monge $60k of equity simply isn't enough to do anything with...leave that alone, work your a$$ off (find side gigs to make extra cash), save up money, and get on to the next owner occupied property as soon as you can. Play the long game and don't get cute with leverage or make compromises in the name of speed. If it takes you 3 more years to get into your next deal, that's fine. Slow and steady still wins the race.
- Investor · NC · Member since 2022 · 18 posts · 10 votes9mo
What everyone else said! Save over access equity.
- 9moWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
The strategy operates effectively in high priced Providence markets. The FHA house hack starts with poor cash flow but helps you create equity and decrease your housing costs while you prepare for your next purchase. The combination of this method with your upcoming investments in affordable markets and value added projects will help you achieve maximum cash flow expansion.
Good luck!
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