Housing hack advice for a newbie

Housing hack advice for a newbie

Boca Raton, FL · Member since 2020 · 11 posts · 8 votes

Hi everyone,

Thank you for taking the time to read this, any response will be greatly appreciated!

I'm an ultra newbie to real estate investing, or any kind of investing for that matter. I'm at the point in my life where purchasing a home is the next step I want to take but I really want to look at this as an investment opportunity over anything else.

I recently came across the term "housing hack" and am super interested in learning more. When I decided a home purchase was my next goal, I always envisioned a single family home where I could settle down for the time being but I've had a bit of a shift in mindset. I really would love to be able to find a duplex or some other type of set up where I could live in part of the home and rent out the other portion. My hope would be to highly offset my cost of living so I could put more money aside for a future investment.

I'm located in florida, I was saving/planning for the lowest possible down payment and getting first time homebuyer assistance for closing costs. My broker mentioned to me I would need 15% down for a duplex, this is not realistic for me at this point. Does anyone have any tips, tricks or hacks for making this work? Or would you suggest I continue to rent and save and wait it out?

Thank you so much again!

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Shawn McenteerBusiness Member
Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
6y

@Giulia Mylla  15% down is not necessary for owner occupied purchase.  You can go as low as 3.5% down, this included multifamily property or single family.  My suggestion would be find an investor friendly realtor in your area that has more investment knowledge and lender recommendations. 

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  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    6y

    @Giulia Mylla  15% down is not necessary for owner occupied purchase.  You can go as low as 3.5% down, this included multifamily property or single family.  My suggestion would be find an investor friendly realtor in your area that has more investment knowledge and lender recommendations. 

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  • Rental Property Investor · Member since 2018 · 42 posts · 20 votes
    6y

    I agree with @Shawn M. When I was looking for my first owner occupy I was originally going to do an FHA loan which only requires 3.5% down but it was hard to make the numbers work with the PMI. Then my agent told me about a local bank that only requires 5% down with no PMI! It was definitely worth it to pay an extra 1.5% to save so much on our monthly payment. So definitely find an investor friendly agent and research local lenders who may offer better loan rates/benefits.

  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    6y

    @Meghan Cheek 5% down with no PMI? That's awesome, where can I find that?

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  • Rental Property Investor · Pompano beach, FL · Member since 2017 · 478 posts · 194 votes
    6y

    @Giulia Mylla Come to our women’s group March 25th listed on events page Ft Lauderdale.

  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    @Shawn M. That's great to know! I'm assuming he must have missed the part where I mentioned I would be living there. I'll have to have a phone conversation with him to see what his experience is with investors.

    Thank you for the information and advice!

  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    @Meghan Cheek awesome! I guess I'll have to shop around on the lending options to see what would work. Hopefully I can find a deal like that!

    Thank you!

  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    6y

    @Giulia Mylla Possibly he did miss that part but if so I want his lenders contact information because non owner occupied properties typically require 25% down payment.  

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  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    @Shawn M. Oh wow! I'll call him next week and get more information - I had requested info via email so maybe there was some miscommunication that happened.

    I'll keep you posted if that 15% was accurate.

  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    Hi @Rita Medeiros. That sounds great, would love more info on that. I'm having a hard time finding it though (I'm super new to this site so still learning to navigate it)

  • Rental Property Investor · Member since 2018 · 42 posts · 20 votes
    6y
    Originally posted by @Shawn Mcenteer:

    @Meghan Cheek 5% down with no PMI? That's awesome, where can I find that?

    Trustco Bank!  I believe they have locations in NJ too so definitely check it out.  They have low closing costs and no escrow.  

  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    6y

    Will check this out. Thank you 

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  • Lender · Member since 2020 · 89 posts · 69 votes
    6y

    @Giulia Mylla and @Rita Medeiros Hi Ladies, I hope to join in this meeting and discuss what I can offer.

  • Investor · Greenville, SC · Member since 2018 · 23 posts · 7 votes
    6y

    @Giulia Mylla

    I'm so excited to hear you're getting started in REI!! Especially with house hacking! That's been a huge life saver for me!

    As everyone has mentioned above, getting the 3.5% or 5% owner occupied loan is the best way to go for the loan product. Personally I've done both and I've also done the multi family approach (a triplex) and the SFH approach. The triplex was more lucrative for me as I had 2 additional units plus a roommate. I was cash flowing $800/mo while living there and once I moved out I cashflowed $1275/mo.

    In the SFH I got a 4 bedroom (4+ are the best). I covered utilities and WiFi and what not and just included that in rent. After utilities and WiFi I'm still cash flowing $200/mo in a new build.

    So far it’s been one of the best ways to get ahead financially at a young age and if you’ve got any questions don’t hesitate to reach out!

    Best of luck 💪🏼

  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    @Eric McAvoy that's awesome! Thank you for sharing your experiences and success with this. I'm excited to get started and make it work.

  • Real Estate Agent · Chattanooga, TN · Member since 2018 · 258 posts · 136 votes
    6y

    @Giulia Mylla

    That 15% down thing is definitely not true as other people have been saying. You shouldn’t have an issue getting a 5% or 3.5% (or possible even less) down loan.

    Also you should look into the book The House Hacking Strategy by Craig Curelop. He does a great job at explaining everything there is with house hacking

  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    6y

    @Giulia Mylla there are 5% down conventional options for multi family depending on your income earnings. If you’re beyond the income limitations, then you will start at 15% down with a conventional mortgage. 

    3.5% is all that's needed for an FHA loan.


    What @Meghan Cheek is talking about sounds like a 5% down loan option for a single family residence on a conventional mortgage that has LPMI(lender paid mortgage insurance) for single family. What this does is take away your mortgage insurance while fitting it in as an added cost into your interest rate. Be weary of that. 

  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    @David Nacco thank you! Im not sure where that 15% came from so I'll definitely be getting some clarification on that.

    Thank you for the book recommendation! I'm going to check it out right now.

  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    @Raymond J. Rodrigues thank you! That makes sense, appreciate the break down. I think once I see hard numbers I'll get a better understanding of everything.

  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    6y

    @Giulia Mylla feel free to ask as many questions as your heart desires, that’s what I’m here for :) 


    I am also a local here in SoFlo

  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    @Raymond J. Rodrigues thank you very much, I'm sure I'll have lots of questions.

    I ordered the book you recommended so I'm excited to get started on that.

    Let's definitely connect sometime, we are so close!

  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    6y

    @Giulia Mylla we are! I’ll reach out to you :)

  • Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    6y

    @Giulia Mylla you need 15% down for conventional, only 3.5% if you go FHA

  • Real Estate Coach · Salt Lake City, UT · Member since 2017 · 272 posts · 414 votes
    6y
    @giulia mylla One more tidbit -- if you buy a 2-4 unit and live in one, you can typically get the same type of low-down-payment loan for an owner occupant. What's even better, is the rental income from the other units will count towards your max purchase price, allowing you to qualify for more. If you're looking for SFH, pay attention to bathrooms. Some houses have multiple master suites, which gives your roommate(s) a private bathroom. Master suites will rent for more than rooms with a shared bathroom. Just sayin.
  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    6y

    @Bill Goodland there are 5% conventional options for 2-4 family if you qualify. Lookup Home Possible Freddie Mac conventional products. 

  • Boca Raton, FL · Member since 2020 · 11 posts · 8 votes
    6y

    @Brian Briscoe that's great to know, thank you!

    Thanks for the tips, I'll definitely keep that in mind.

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