House hack fourplex - FHA Loan self sufficiency test Austin

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House hack fourplex - FHA Loan self sufficiency test Austin

Seth Tate
Austin, TX · Member since 2016 · 5 posts · 4 votes

Searching for a fourplex to house hack in south Austin, TX with an FHA loan. Struggling to find anything in my market that will pass the self sufficiency test using an FHA loan with 3.5-10% down. I've been looking for past 6 months with an agent and no luck without putting 20% + down. Is there anything I'm not thinking of or other strategies others have had success in hot markets? My backup option is to start looking at duplexes but know there's not as much cash flow.

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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
6y

@Seth Tate I would just get started and do something. One property won’t make you rich so grab a duplex and get started!

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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    6y

    @Seth Tate I would just get started and do something. One property won’t make you rich so grab a duplex and get started!

    [email protected]512-888-9122
    The Moorhead Team5139 Reviews
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  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    @Seth Tate Heads up, the FHA loan program is going through a major shift at the moment due to the crisis. Interest rates on FHA are approximately 2 points higher than March plus credit score requirements have been raised as well. I would recommend looking to use a conventional loan with 3-5% down if you are looking for lower downpayment options.

    [email protected]512-674-5478
    Ryan Kelly Group - Keller Williams5109 Reviews
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  • Seth Tate
    OP
    Austin, TX · Member since 2016 · 5 posts · 4 votes
    6y

    @Jordan Moorhead
    I appreciate that. Might be best to get out of analysis paralysis and just get my first property.

    @Ryan Kelly
    Looked at trying to use conventional but minimum of 15% down for duplex and 20% down for fourplex from Freddie Mac. Also don't qualify for Home Possible due to income. Haven't talked to my lender recently so will be sure to do so to see where FHA rates are at. Thank you for commenting.

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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    6y

    @Seth Tate I think so! Find something that works for you and prepare for the next one. You need a few. I had the same issue and once I finally got going it started to move more quickly and build.

    [email protected]512-888-9122
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  • Sooraj Maharjan
    0 · Member since 2020 · 19 posts · 6 votes
    6y

    @Jordan Moorhead I was trying to find a duplex too, but haven't found one that works in terms of numbers. Are you investing in Austin, TX? If so, can you suggest some neighborhoods I could look at? I also started looking at SFR to first live in for a bit and then rent out but upon calculation cashflow was negative so ditched that idea too.

    So, I seem to be on the same boat as @Seth Tate in terms of analysis paralysis, which I need to dig myself out of. On that note, I just watched Paul Moore's channel yesterday and he suggested that we should hold on to our cash as Housing Market is going to be the next domino to fall and that there will be opportunities to buy. What are all of your thoughts? 

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  • Andrew Zannotti
    Killeen, TX · Member since 2017 · 127 posts · 91 votes
    6y

    @Seth Tate awesome job on doing a house back. By self sufficient test I am getting that you are hoping to be able to live in one side and rent the others out with the property being fully sustainable. I'm stationed out of Killeen about an hour away and absolutely love Austin. While no ideal a possibility could be looking at a proper that you will occur out of pocket costs on monthly. At the end of the day it would still be cheaper than paying a full rent or mortgage and appreciation in Austin is through the roof so you would be paying a small price today for big time equity in the future. If I misunderstood your post please let me know because I thought it was an interesting topic.

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  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    @Seth Tate If this will be your primary residence, you can put down less % than 10-15 percent. Shop around for lenders if you aren't getting the best terms from your current lender. 

    [email protected]512-674-5478
    Ryan Kelly Group - Keller Williams5109 Reviews
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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    6y

    @Sooraj Maharjan I have seen quite a few in the northeast Austin area. I'm going to be picking up another duplex on the east side of the city soon myself. Either Northeast, East or Southeast is where I've seen anything that works, east of 35

    [email protected]512-888-9122
    The Moorhead Team5139 Reviews
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