Hi @Christopher Hall ,
I've successfully executed 3 house hacks exactly as you have described with very few bumps in the road. Providing you take care of any outstanding maintenance needs while you are homesteading the property and properly screen your new/first tenants (aka: don't get too antsy to get tenants over getting the right tenants), it should be a relatively pain-free process.
The biggest hurdle I had on the 3rd property was financing. I hadn't structured my 1st property cash flow/income properly and didn't have a proper lease due to renting to a friend. Between those to things, the mortgage broker and I had to get creative. Do not make that mistake, regardless of who you are renting to. Consult a mortgage broker/lender and CPA on how to do things properly and what the requirements for your loan will be.
The second part of the hurdle was that during the underwriting process for the loan, I was required to get a lease signed on the 2nd property so I could lower my debt to income ratio in order to show that I could "afford" the 3rd property that I wanted to purchase. Without a signed lease in place, my debt to income ratios wouldn't meet traditional financing requirements. This means I had less than 20 days to get the home ready for rent, list it, show it to prospective tenants, wait for applications, screen, select, etc... It was a weeee bit stressful but well worth the effort.
It's entirely possible that your financial position is different than what mine was at the time, but hopefully, my experience will be able to save you some stress.
Best of luck on your journey!
Luckily I am working with two incomes, but neither of them is extravagant. I am active duty military on the enlisted side and my wife is a school teacher. Together we make enough to start making this all happen though. We are set to close on April 10th at a purchase price of 181,900 with my va loan. I expect the property to rent for about 1395 a month once we move out early next year and my mortgage will be right at 1100. Also this home is new construction so I am expecting very low maintenance cost for the next 5 years or so.
I closed on the second home today and am very excited, I wish I could find a way to purchase a third home sooner than next year!
@Christopher Hall @Nick Kaihoi Congrats to both of you! What kind of loans did you have on your first and second homes? I am currently house hacking a duplex with a FHA 3.5% down loan. I am looking to purchase a second property but not sure the best type loan to pursue. REFI and do FHA again while I can? Take out a second conventional mortgage? Find private money? Curious to see what your thoughts are?
Both of my loans are Through the VA. I intend on using conventional for the next one, from my understanding you can get better interest rates with a conventional loan. In a few years once the first house I bought appreciates a little more I will refinance it ( I am trying to avoid paying PMI) and open up some of my VA eligibility to purchase with out paying PMI again.
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