Buying my 2nd Rental Property

[Michael Iquin]

Hello!

New to investing. I just want to ask some advice regarding next move in acquiring my 2nd rental property (Occupied). Preferably another Duplex and wants to take advantage of low down-payment options. 

Situation: Currently house-hacking a duplex. used FHA loan. We have been living here for about 6 months now.

My LTV is is 87%.

Cash on hand 50k.

We have a 720+ credit score.  Stable W-2 JOB. 

I appreciate any input. Thanks! 

[Jeff Nash]

@Denver McClure can weigh in. 

[Ryan Thomson]

@Michael Iquin I would consider doing a 5% down single family home. You could make a second unit with a basement or a garage conversion. 

[Michael Iquin]

Quote from @Ryan Thomson:

@Michael Iquin I would consider doing a 5% down single family home. You could make a second unit with a basement or a garage conversion. 

 Thank you for the insight.

[Andrew Postell]

@Michael Iquin yeah, once you satisfy your 12 months of occupancy then use 5% down to purchase a single family home with a conventional loan. That's the easiest, least restrictive route. If you are moving more than 100 miles away from your current FHA loan then some options open up. But if you are staying in the DFW area, just purchase a SFH and call it a day.

Also, have you been to any local meetup groups?  There are quite a few in the area.  

[Denver McClure]

Hey @Michael Iquin, congrats on already scoring your first rental property. I would also recommend you wait that full 12 months before speaking with your lender about the next loan type and property identification. Yes, SFHs are easier to find and finance, but don't shut down your duplex goals just to take the easier route. Right now I'd be focusing on finance preparation to acquire a strong rental, and have liquidity ready to go for down payment, renovations, additions, etc. Preparing for that next property is just as critical as putting in the right offer with the right financing. Feel free to reach out if you want to chat sometime!

[Michael Iquin]

Hi! Thank you! 

My wife and i are both Registered Nurses and wanting to do travel nursing in California the next year or two. So i think, best bet for us is to acquire a SFH with a mother in law suite/adu while we are still here in DFW. lastly , Can we still be qualified for another FHA if we decide to live in California and do another Duplex/ multifam?

[Michael Iquin]

Quote from @Andrew Postell:

@Michael Iquin yeah, once you satisfy your 12 months of occupancy then use 5% down to purchase a single family home with a conventional loan. That's the easiest, least restrictive route. If you are moving more than 100 miles away from your current FHA loan then some options open up. But if you are staying in the DFW area, just purchase a SFH and call it a day.

Also, have you been to any local meetup groups?  There are quite a few in the area.  

Hi! Thank you!

My wife and i are both Registered Nurses and wanting to do travel nursing in California the next year or two. So i think, best bet for us is to acquire a SFH with a mother in law suite/adu while we are still here in DFW. lastly , Can we still be qualified for another FHA if we decide to live in California and do another Duplex/ multifam?

[Simon Holt]

Michael this is such a good question.  I'm just getting started with a house hack and have similar questions myself.  

Also wondering how to determine if my rental amount is competitive for my market (Marietta, GA) and if I need to worry about additional insurance needs since I have a pool that the guests will be encouraged to use? Do you use furnished finder as traveling nurses or another service?  I'd love to know what works best for your situation.

[Andrew Postell]

@Michael Iquin oh cool. In most cases, you would be able to use another FHA loan and buy. But with a travel nurse, there's a few nuances that come into play. Usually, you would lose your housing allowance if you moved within a certain distance of your workplace. And to use an FHA loan, you would need it to be your primary residence. So there's a little "catch 22" in there for that profession. I get this type of question frequently since the wife is a nurse as well. Buying a SFH with a ADU would be a great plan here I think. Thanks for posting!

[Ryan Thomson]

@Michael Iquin You should be able to get another House Hack. If you have been showing your income on your tax return, you can use 100% of reported income OR 75% of a lease for the current house hack. This should cancel out most of your debt (in the DTI calculation) for your current mortgage.

For the second house hack, you can also use the leases or market rent for the units you won't be living in. You can count 75% of that rental income as qualifying income. The income from your job will help you qualify as well.

However, if you want to only put 5% down again on a duplex FHA is your only option and you can't use two of those within 50 miles of each other. May have to do a 5% single-family primary conventional loan