Real Estate Agent 路 Los Angeles, CA 路 Member since 2016 路 7 posts 路 6 votes
Hey everyone...
If you had $200,000 in the bank...what would you do?
Buy a house (like my accountant suggests) or buy an income/investment property like a duplex or triplex or 4-plex? Or...would you look into something else?
I don't want to house hack...mainly because I'm 38 and don't want roomies...but I like the idea of my own unit...so an investment property sounds good...or even a house with a guest house...I could rent the front house...live in the back.
Then there's the other opportunities like syndication that don't get messy dealing with property managers, tenants, etc.
What would I do? Shut off your DMs on here because now everyone on here knows you have $200k. That is a little bit of a joke, but seriously look out for off the wall investment proposals coming your way.
Without knowing what you like, are good at or want, this is extremely difficult to address. So- congrats on the savings! Check out the myriad of other 'I have x, what should I do' posts.
As far as househacking, it's not always roomies like back in college. An ADU, MIL, casita, carriage house, etc are excellent ways without having someone in an extra bedroom. I've had a 'luxury' househack since '07 and it's been great overall.
If you had $200,000 in the bank...what would you do?
Buy a house (like my accountant suggests) or buy an income/investment property like a duplex or triplex or 4-plex? Or...would you look into something else?
I don't want to house hack...mainly because I'm 38 and don't want roomies...but I like the idea of my own unit...so an investment property sounds good...or even a house with a guest house...I could rent the front house...live in the back.
Then there's the other opportunities like syndication that don't get messy dealing with property managers, tenants, etc.
Thanks in advance...
Kirk
Kirk,
I'm 38, married, and have a daughter -- and I'm househacking a duplex in Hancock Park.
I think you should buy and move into a fourplex. Somewhere south of Hollywood but north of Pico, as far west as you can afford to buy. You might not cashflow, but your out-of-pocket will be extremely low, and you'll reap the benefits of appreciation on a large asset.
With an FHA loan, you can apply 75% of the current rents on the building toward your income to qualify. The current FHA mortgage max on a fourplex is $1.472M. Couple that with $125K of your capital, and you're shopping for a $1.6M fourplex.
The other $75K is for closing costs and reserves.
The FHA loan requires mortgage insurance, but I'd love to see what the numbers look like when you factor in the rent collected. I bet your monthly out-of-pocket to live in this fourplex would be lower than your monthly out-of-pocket to rent in this fourplex.
It鈥檚 the SAME mortgage product for a studio apartment as an up to 4 unit multi-family!
Get a duplex, triplex, or quadplex and enjoy the low % rates for living in one of the units... and rinse and repeat every year BECAUSE the banks will cover the property to investment income after one FULL year of tenant income on the books, freeing you up to repeat the process with another low % rate mortgage product including FHA
Many banks offer competitive products that are better than FHA for @ 5% down instead of 3% down FYI so ask for a good banker in your area, don't just walk into the branch!