Sell House and House Hack Duplex?

[Patrick Ritter]

First time poster here looking for advice on house hacking. My wife and I have a 3 bed/1.5 nicely updated house in a B+ location. We both make decent money at our respective jobs but we are considering selling our house so that we can owner-occupy a duplex. Our goals are straightforward: 1.) eliminate our mortgage via tenant cash flow; 2.) more quality time as a family; and 3.) save more to invest in subsequent residential multi family units to build long-term wealth and security. I’ve been reading a ton and have begun analyzing deals on a daily basis. What I need some input on is financing. Specifically FHA v. Conventional loan. Am I even eligible for an FHA loan because I’m not a “1st time home buyer” even though it would be for a primary residence? Also even if I am eligible for an FHA loan do I want it compared to a conventional 30 year? Love this site and greatly appreciate any advice! Thanks, Patrick

[Chris Szepessy]

I think selling your current house and buying a duplex or even tri/quadplex is a great idea. Had I gotten into RE prior to being married and having kids, I would've done the same thing. Having your wife on board with the idea is huge too.

You can use a FHA loan. The downside to FHA is the PMI, but if you can save $30k+ on a down payment, then it makes sense. Just make sure when you run the numbers that you include the PMI, which I think is usually 1% of the loan amount on an annual basis. A $100,000 loan would have $1000/year in PMI which is $83.33/month. You can refi out into a conventional mortgage once you have enough equity in the house to get rid of the PMI.