What would you do in my situation?

5 Replies

Hey guys,

A few days ago I posted about a plan I have to acquire a Duplex, rent out the other side and live cheaply. I received a lot of help from some local guys on the forum and it really got me going. The original plan was to try to get one by April when my apartment lease is up, but that is starting to seem a little unrealistic for a lot of reasons. I'm looking for a little bit of guidance as to where to go from here. 

Ignoring the fact that my lease is up in a few months (I don't mind extending), I wanted to home-hack a Multifamily. The market in my area (Fort Collins, CO) seems pretty hot, this was confirmed by a gentleman much smarter than myself in my other thread from the other night. A duplex here is about 350K-400K, and they are rare to find. If I were to use my VA loan from my primary bank, I only qualify for 200K on a good day (my bank is the only one I have inquired with though). I am not going to give up and just mope away with my tail between my legs, but I am wondering if maybe I should pursue a different avenue for the time being, like a live-in flip, or something like that. I am very new at the real estate game and only have not even a year of studying it as a hobby, so I wanted to get your guys ideas. I am willing to try anything really, and will enjoy the learning experience, but I also work full time and am a full time student so time is pretty constrained.

Thanks ahead of time for the help!

When we got our first quad-plex as an owner occupant. We had to go to a smaller town next to our market.  The added commute to work was a pain.  But it was the only way to buy within our means.

A 2nd though would be to look for value add and try for a 203k loan.

Be creative in how you find stuff. Learn to notice where there might be possibilities. If you see something be prepared to spend a few hours looking into it. The best commercial property I ever got started with a trip to the office of records after hearing about it from a friend. Tell everyone you know that you want to buy a place, they might help you out or think of you when Aunt Jane wants to go to the nursing home. Sometimes you might get something under market this way or maybe not have any competition, which can be just as rewarding.

@Stephen Spradley Have you considered Greeley? I'm sure it's not ideal for work and school full time if both are in FC but you can find a duplex there for around $200,000 occasionally. 

I'm in a similar situation as far as the finance restrictions due to limited income and history (I'm self employed and 2015 was a tight year). I'm not sure about VA loans, but with FHA you can count 75% or rent on a multi Family property as additional income.

Let say you are looking at a duplex. With just your income you might only be approved for $200k, but with rent counted you could be approved up to about $280k ($1200 rent x 75% x 55% debt to income with FHA = roughly $80k in additional mortgage).

$280k could get you a duplex in the Greeley area. 

Lots of good stuff here. I think I've decided on what I want to do. With all the studying I've been doing, I just feel like the best option would be a MF, but not house hacking since that pretty much seems impossible here and I don't want to live in Greeley. Essentially just going to save save save, start checking out every MF in the market to get a feel, and pull the trigger sometime this year utilizing a loan that doesn't require me to occupy.

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