Creative Financing Options with High DTI House Hacking

[Kyle Rich]

Hey everyone,

I am looking to get into house hacking currently to reduce my monthly housing expenses and, ideally, cashflow while I am living in the property. Currently, I am looking to use an FHA loan since it requires a low down-payment. My DTI is too high currently due to having about $135,000 in student loan debt between undergrad and graduate school. I was pre-approved for $175,000 for a duplex using an FHA loan. For the Springfield, MA market that I am looking to house hack in there aren't any deals that the numbers work with.

I was looking for some advice on the best way to get into a house hack with my high DTI. So far for ideas I have are partnering with somebody to fund the deal and have my partner put the loan in their name and seller financing. One of my good friends is looking to purchase a house this year and house hack as well so I would probably partner with him and save/pay down my student loans while living with him. I am unsure if my realtor is comfortable with pitching seller financing to sellers right now. Any other creative financing ideas would be greatly appreciated and if you need anymore information let me know!

[Ryan Thomson]

@Kyle Rich

House hacking is tough to cashflow in year one (with current house price run-ups and interest rates) for a couple reasons:

1. You are living in one of the rentable units

2. You are only putting 5% down so your loan amount is much larger and therefore your mortgage payment.

Lower your standards and get into a house hack that will allow you to avoid throwing rent money away every month. You know this, but don't forget all the other ways real estate makes you money. Paying down your mortgage and owning an asset that will appreciate over the long term.