Should I "Weekend House-Hack" in a neighboring state?

Question

Greetings all!

Apologies if the title or subject is a little confusing. New here and new to all things REI.

Essentially, I currently live in NY with my wife. Her job requires us to live in NY.  She wants to buy a property close to family to start a family and is looking at very expensive options that to me just won't help us towards financial freedom. I, on the other hand am trying to buy us a first property that will lead us towards financial freedom.

The two options I've come down to is either 1) looking at a 2-unit property in NYC and seeing how I can increase it to a 4-unit (depending on how that property is zoned) to increase value and househack in that and still live in NYC and close to family? While still taking advantage of the FHA 3.5% down loan?

Or option 2) buy a property in a neighboring state like NJ, PA or CT and "live" there on weekends in order to qualify for the FHA 3.5% down loan?

There is so much information about REI so any tips for this situation would be highly appreciated in helping me hone in on what to focus on. Thanks in advance guys!

Jaysen Medhurst · Answer

@Hung Tran, option #2 is only viable if you actually plan to live there, not just pop by on weekends. Violating the residency requirement of an FHA mortgage is fraud. They will come down hard on you, potentially ending your investing career before it has started.

Don't play games like this. It's a terrible idea.

The flaw with option #1 is that it will cost SO MUCH money to convert a 2-unit into a 4-unit in NYC that it's very hard to imagine the numbers working.