I house hacked my first home and rent out the bottom for 1100/month. My wife and I will be having a kid soon and want to basically duplicate what we have done with our first home but with a bigger house. We have rented out the bottom of the house for 2 years. We would like to keep our first house to rent out the top and bottom while renting out the bottom of our larger future house. I just talked to my real estate agent and he said he doesn't think we have the capital to make that work right now. We have 10k in savings, and 13k in a 401k/Roth IRA. The real estate agent said that in order to find what we are looking for we would need to look in the 400k price range and have to put a minimum of 5% down. We have high credit and low debt. How would you suggest getting the capital for the down payment on the next house?
New to Real Estate · Boynton Beach, FL · Member since 2018 · 59 posts · 31 votes
6y
@Blake Clement - first of all, congratulations on a successful first investment property! House hacking is a great way to get started.
I like your plan of wanting to continue to house hack, as that will be a lower cost to entry. Would a HELOC on your current property be an option? I wouldn't recommend touching the money in your 401k or Roth IRA if a HELOC is an option.
When talking to my real estate agent I asked about the heloc and he said it was a possibility to go that route but that it would lower the amount I would qualify for due to the fact that my debt to income ratio would be higher. He said he didn't think I could find what I'm looking for if I used the heloc. Not sure if thats the case or not which is one of the reasons I wanted to reach out on here. Thank you for the response by the way!
New to Real Estate · Worcester MA · Member since 2020 · 8 posts · 0 votes
6y
You could entertain the idea of Seller Financing. Which is actually what I am trying to do for my first ever home. Im 23 and looking to move out, with low funds, seller financing seems like the way to go for me right now. I, too, want to acquire an owner occupied multifamily. Its unorthodox but I won't know until I try.