My husband I make about 140k total per year before tax. We live in a tiny converted garage studio in Oakland for $1400 per month. We also support extended family. This is a very important value to us and nonnegotiable. We pay my brother in law's rent of $900 at his college in SoCal plus his food and we pay his college tuition of around 24k per year. There is chance that another family member will be starting college at a junior college and possibly moving in with us next summer. To pull this off, we would need to move into a slightly bigger apartment.
I am very determined to make all this work and still make good financial steps to the benefit of all of us. We have a total of 24k in savings, but we will do our very best to keep increasing that. We will also work to keep increasing our salaries, but I expect steady rather than sudden increases.
I keep wondering if there is any way to use house hacking to get into a two bedroom unit in a multifamily property so that we could purchase a home and keep the mortgage payments low. But I'm starting to feel like this may be foolish and/or impossible under the circumstances. I would appreciate any thoughts or advice from anyone. Would it be impossible to get a duplex or triplex with 3.5% down and mortgage minus rents under 2k?
You can do this if you buy a duplex. I did it in 2016. I went from renting a 2 bedroom for $2,000/month to owning a duplex and living in 2 bedroom apartment that I owned for ~$1800/month in mortgage payments (after rent is paid).
You should also look into the NACA loan for a 0% down loan product with no PMI. https://www.nacalynx.com/naca/...
And look into the American Dream Loan from US bank. It allows you to buy a duplex for 3% down with no PMI. You need to ask for that product specifically they don't advertise it because it's not a profit center for them, it helps them conform to requirements in the Community Reinvestment Act. https://www.usbank.com/corpora...
If you are open to not as upscale areas of Oakland (East) there are duplexes for 400-600K. They are likely occupied so you would either need to do cash for keys or owner move in eviction. Both of these options would still cost 10K or more and take time. It may not work either depending on your tenants status (disabled, been there 10yrs + 60 yrs old etc). With your savings, you would only be able to do 3% down or less. With COVID-19, banks are getting more strict with lending and require more down payment so it would be unlikely to secure a loan with such low down payment. Further, owners probably don't want to sell to someone who is only putting 3% down payment as they know the likelihood of closing is slim. One alternative strategy is to rent a home with an empty ADU and then sublease that ADU out. You may not own property this way but it may solve your issue of having your relative and yourself into a 2 bedroom while coming out of pocket for not too much more than you currently do on a monthly basis.
Thank you very much for your responses. I will definitely continue researching options you both mentioned. We also plan to keep increasing our savings which may help open more options.