First Time Homebuyer Looking for Investment Opportunity

[Alex Smith]

Hello, 

My wife and I are looking to buy our first home within the next year and have some questions. We both have relatively high incomes and live in a HCOL area. I am trying to avoid the temptation to buy a nice, turn-key, single-family home and live happily ever after. I want to use this opportunity to get into our first investment property and potentially house hack. I am thinking about looking for a multi-family, but these properties seem very limited in our area. An alternative would be to buy a property with an unfinished basement and convert it into an ADU, but I know there can be a lot of red tape with this. Any insights on getting into the game in a HCOL area where multi-families are limited? Also, even if we have enough to put down 20%, should we take advantage of FHA and use the extra money for the renovations? One more question: with our high income, is it wise to put the property under an LLC to separate it from our assets?

I know a lot is going on here, but any insight is helpful! Thanks 

[David Krulac]

@Alex Smith I like buying a moderate priced house in your area, getting the owner occupied mortgage with the lowest interest rate and the lowest down payment, and fixed for the longest period like 30 years. Go maybe FHA 3.5% down or conventional 5% down. Maybe rent a room or two to other people for some income. Stay at least a year then rinse and repeat. Somebody I know did that 7 times always getting the lowest down payment and lowest fixed rate mortgage as a legal owner occupant. Besides a townhouse and several detached houses he also bought a duplex, a 3 plex and a 4 plex using this same serial owner occupant financing.