How much is too much for your first purchase?
Hi guys,
About myself; I'm a Philly native who's been living in Brooklyn for about 12 years. 33 y/o, single, no kids, and employed full-time working remotely. I'm looking to House Hack a multi-family in Philly or East Brooklyn where I currently live. I have an excellent credit score, and make mid-six figures, with cash reserves, a 401k, and a stock portfolio. I'd like to put about half of my cash savings towards my first investment. My long-term goal is to Buy and Hold or BRRR, to create a portfolio of rental units that will help support my mom with retirement. My short-term goal is to find a place to live, as I'm currently on a month-to-month lease.
There are two things that I recently discovered that threw me for a loop.
1)Wait, I qualify for how much???
The past five months I've been looking at homes in Philly's C/D areas for $200-$300k, to reno with a 203k and some sweat equity. Recently, I reached out to my broker at Cross Country and became aware that I qualify for over 700k mortgage through FHA. Which would allow me to purchase in Brooklyn. However, I could only afford a property this expensive if I can wrap the closing costs into the mortgage via seller's assist.
I'd love to purchase a home here, maybe in East New York or Flatbush. On the flip side, it would also allow me to cop a really nice turn-key triplex or quadplex on the University of Pennsylvania campus in West Philly for that amount. However, I'm wondering is it financially irresponsible to take out such a large mortgage for my first time purchase?
2) Bank of America will give me free money??
The second thing I recently discovered is the BOFA Affordable Solutions program. When I learned that I could get a $17k towards closing and downpayment costs, I was instantly interested. The downsides are that (1) The rate is a little higher at 3.2%, and (2) I make too much money for Philly or NYC. To use this loan I'd have to look in Newark, East Orange, Long Island, Hudson Valley, or even in Oakland where my job's headquarters are based. I'm open to living in any of these places for the next year if it makes more sense to go this way instead of an FHA.
So that's the gist. Right now I feel like I've got a case of "analysis paralysis" and information overload. I'd love to get your advice to put things in perspective.