Current house hacker that is looking for second property

[Michael Dallas]

Hey I am currently in my first house hack. It is going great and I have caught the real estate bug! Now I want to buy another property and house hack that as well so I only have to put 5% down again. I have only been living in this current property for around 4 months.  What are my options regarding moving out of this house and into another? Thanks!!

[Adrian Lammersdorf-Scioll]

If you bought the first property in an fha you are going to have to refinance into a conventional, but even still with that you may have to wait a full year until you can do anything unless you refinance, and/or have made enough capital improvements. Make sure to check the terms of your mortgage, your lender should be able to tell you if you ask them. After a year you can buy another property with an FHA loan assuming you don't already have one or refinanced out of one. If you have a friend or partner that stays there and isn't on the mortgage you can also partner with them and take partial ownership. A good lender will be able to guide you, stay away from lenders that tell you that you can't do it, or boast how many years they have been doing that. I say this from experience. I bought my first property conventional and rented the rooms, than just bought a duplex with an FHA loan after a year of owning it/living in it (the conventional single family home I had). A good lender will guide you on how to do it, they are out there, you may need to go through a good amount to find one that is good if the one you have currently cannot help.

[Andrew Postell]

@Michael Dallas thanks for the post and congratulations on your first property. Only 4% of Americans own 2...so you are half way there! First, just in case it matters, you can 100%, absolutely have 2 FHA loans. There are rules to it, but it is possible. Second, when you purchase your current property you pledged to live in the property for 12 months. Now, mortgage understand if you get transferred across the country, or if your family grows in size...but outside of a "significant life event" you will need to continue to occupy that property for the remaining time of your agreement. Once you get to the 10 month mark you can start shopping for a new home. There are lots of people that just buy another primary home every 1 - 2 years and have several properties. It is a strategy that works so stay on track and you will be fine later down the road.

Thanks for posting!

[Ryan Muska]

Congrats on doing your first house hack! 

Like @Adrian Lammersdorf-Scioll said, you will have to wait a full year to move into another primary residence. Otherwise, you can get a conventional for as little as 3% or an FHA for 3.5% down payment. Even if you have an FHA, you may be able to qualify for a second FHA (as long as it meets exact guidelines). In order to qualify for these you can typically use 75% of the rental income, as well.

Keep on trucking!

[Michael Dallas]

@Ryan Muska @Andrew Postell @Adrian Lammersdorf-Scioll

Thank you all for the thoughtful responses! My loan was a 5% down conventional loan because I got slightly better terms with that rather than an FHA loan. I am still pretty sure in my loan contract I have to still live here for at least one year because it is under my primary residence. So do conventional loans still have as strict rules on staying the full year as an FHA does?

[Ryan Muska]

Quote from @Michael Dallas:

@Ryan Muska @Andrew Postell @Adrian Lammersdorf-Scioll

Thank you all for the thoughtful responses! My loan was a 5% down conventional loan because I got slightly better terms with that rather than an FHA loan. I am still pretty sure in my loan contract I have to still live here for at least one year because it is under my primary residence. So do conventional loans still have as strict rules on staying the full year as an FHA does?

 Yes, for any primary residence, the period is going to typically be 12 months.

[Benjamin Sulka]

Michael, 

You do have to live in the property for those 12 months unless a significant life event occurs. 

Keep stacking up the cash that you're saving in your house hack and go find another when that 12 months starts to approach! 

[Ryan Thomson]

@Michael Dallas you would have to have a really good reason for moving:

1. Not safe

2. Relationship/Family change

3. New Job

[Ryan Thomson]

Here are some things to talk about with Scaling after a year.

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.

When qualifying for the second house hack, if it’s a multifamily, you can 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.

I've done this 5 times in Colorado Springs. I"ll send you a presentation I gave about items to think through when scaling. 

[Benjamin Sulka]

Quote from @Ryan Thomson:

Here are some things to talk about with Scaling after a year.

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.

When qualifying for the second house hack, if it’s a multifamily, you can 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.

I've done this 5 times in Colorado Springs. I"ll send you a presentation I gave about items to think through when scaling. 

 Ryan, 

Would you be willing to share the presentation with me as well? 

That is something I have been pondering for a while now. The goal is to scale through house hacking and I'm looking to chart a better path of how to do this. 

Thanks for any of your time.