Hello BP,

I just joined this community and am blown away by the bond everyone has in here. My wife and I are taking a leap in to this new adventure in Real Estate Investing and we are excited to go head on and dominate any challenges we may face.

Question I have is "would it be best to use our first time buyer opportunity to purchase our first rental property that we will live in for a few months before renting out or should we use a different type of loan for this purchase and saving our first time buyer opportunity on a home for my family?" The goal is to move my family into our purchased rental home in the same area we will reside in. Your advice is much appreciated and thank you in advance.

-ed

Very few loan programs are for “first time” home buyers.  They are generally more either owner occupied, or not.  Any owner occupied loan will have a one year minimum occupancy also.

Hi @Ed Henriquez , 

We have the same last name! I felt compelled to answer your question lol. If I were you, I would aim to buy a multi-family and go for a house hack with your first-time buyer opportunity. Buy a duplex or triplex, live in one unit, and rent out the rest. This method will allow you to live there while you get a grasp on being a landlord. If you do this right, the rent from the other unit(s) will have you paying significantly less than you do now on housing expenses, so you can save up for a down payment on your next property. This strategy seems to hit all your goals. Let us know what you decide to do. Good luck!   

Yes I used first time home buyer conventional loan for my property. Minimum occupancy required is 1 year. This loan was 3% down payment and for single family only

@Wayne Brooks

That's good to know. Thank you for your input.

@J. Henriquez

It is very rare that I come across someone with the same last name lol. We have entertained the thought with purchasing a duplex and haven't completely eliminated that option. I have thought of grabbing a lot that allows manufactured homes so we can rent it out and have it paid off quickly. Figuring that a new home would attract a long term renter. Any input on that is greatly appreciated.

@Andrew Powers

Did the lender apply PMI on your loan? How was the transition into your next loan carrying the first one along side the new one? Assuming if it was still open when you got the second loan.

I would get a "first-time home buyer" loan because you can put down as little as 3% down. This allows you to put as little as possible money down. You can find a property that requires a little work to do under market value, and then refinance when you are ready. The equity that you get out you can put down on another property and scale your portfolio that way. Good luck! 

Originally posted by @Ed Henriquez :

@Andrew Powers

Did the lender apply PMI on your loan? How was the transition into your next loan carrying the first one along side the new one? Assuming if it was still open when you got the second loan.

Yes there is PMI which is fine, the numbers still work great. This is a normal conventional loan with the low down payment being the "new home buyer" incentive. The next property can be purchased with a conventional loan, though it's not "first time home buyer" therefore the down payment will be higher.

I recommend talking to some lenders as well!