What would you do in my position

Question

Question I am 22 years old I have 40k willing to invest I want to get into multifamily 2-4 units buy and hold . My question is what route would you take? my living area in Texas is pretty expensive and doing 20% down would eat up my cash and I’m unsure about househacking at the moment . What would you do with your knowledge and experience any feed back is very much appreciated Thankyou !.

Mike Smith · Answer

@Kevin Lechuga Congrats on starting on this journey so young.  However, it's really scary when you say "I don't want to live in the place for a year".  If you want to get ahead in this world, making sacrifices must become the norm for you.  If you work hard and sacrifice starting at your age, you will have a substantial net worth in 10 years.

If you screw around and only do what's easy and comfortable to you, you will probably turn your 40k into about 100k in ten years.  That's much better than zero savings, but 100k won't change your life by much.

You have to decide today if the end goal is worth the effort and sacrifice.

Caleb Brown · Answer

I'd use FHA and house hack. I get you don't want to stay in it for long BUT it's worth it. In the grand scheme of things 1 year is a short amount of time. After the 1 year you can do it again or pivot. Another option is house hacking a SF with a low DP conventional loan

David Mackin · Answer

@Kevin Lechuga @Shilpa Patel for FHA or any Primary Residence type loan, you must live in the property for a year. This will be the only way to get in with a low down payment amount. Otherwise you're looking at somewhere in the 20% down range.

Matt Lyons · Answer

@Kevin Lechuga

Buy a 2-4 unit as a primary home and put 3-5% down. Live in one unit for a year or two while renting the others out then move out of your unit and do it again and again… nothing wrong with putting a small amount down as a primary residence and then move on shortly after you meet primary criteria which is either 1 or 2 years or may vary per lending

Shilpa Patel · Answer

Hi Kevin,

You may qualify for an FHA loan with a down payment of 3.5% for properties that have 2 to 4 units.  You'll have PMI but you could refinance out of that later down the line.

Keith Lanier · Answer

Be patient with me, cause I just learned about this platform, and I am looking for a solution to my real estate issue, still looking so I said maybe I can help someone else where I look for the answer to my issue...As far as the $40K, I would try to do a deal keeping your cash out the equation for the moment, so that means you have to find a deal that has some equity, you can leverage to get a loan for the remainder of what you need to finance the deal, you may need some of your $40K for soft cost, like closing cost...but for the acquisition and repairs try to keep your money out of it, cause there will be unintentional mistakes and you want to be able to recovery...But you will be OK, Househacking it is a different subject? I am embarking on it as we speak, but we are doing a New Fourplex Development, and there is family and friends and we going to venture out from there...If I missed something then you can come back to me, I hopes this helps in some ways, or others may read it and can elaborate more, make some other points, on the matter...Good Luck to you in your venture and endeavors....My name is Vel be the way!

Keith Lanier · Answer

Good advice right there,,, you have to make the sacifices so you don't have to sacifice nothing later, when it means the most...real talk!

Kevin Lechuga · Answer

Thankyou all very much appreciate your feedback I will look more into fha house hacking👍

Jake Browning · Answer

The first question is what is your living status and are you willing to move into the duplex/quadplex? House hacking is a great way to get any investment. This will help with your FHA loan. If the area you are staying in is expensive then house hacking is a great way for you to eliminate the cost of living for yourself. I would suggest talking to different loan officers around you to help find your best deal. You want to leave yourself some room for improvement. If the numbers you run work for you then its a no-brainer! Good Luck!

Brock Mogensen · Answer

If you are in a position where you can house hack, I suggest doing that.  You can leverage FHA to get into something nice and have leftover cash to do some upgrades to the property to hopefully increase rents.

What would you do in my position

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