House Hacking Single Family House

[Gerardell Brown]

Hello Experts - 

I am ready to purchase my first single-family home this year. I have one roommate willing to pay half the mortgage, so I am trying to figure out how to structure my deal. My plan is to use a first-time buyer's loan program, live in the property for a year, and then turn it into a rental property. Has anyone used this strategy before and had success? Thanks!

[Morgan Tondre]

Quote from @Gerardell Brown:

Quote from @Lindsay Tucker:

I've done this too and it's a great strategy. Have you talked to a few lenders yet about your financing options? When you say you're trying to figure out how to structure your deal, do you have any specific questions we can help answer? 

Yes, I have contacted a few lenders to find the best terms/rates. In terms of structuring the loan - I am in the Houston market looking for a deal that will cash flow. For most of the numbers I am running for an SFH 230 - 300K (with less than 20 percent down), I would have to be super aggressive with negotiating with the current interest rates. I am thinking since this is my first deal, I will be living in the home to find something that will potentially cash flow 2-3%, then refi in 12 - 18 months to get 5 - 7% cash flow. As a beginner, I just want to know if this is a good strategy.

 For a short answer, yes! It's a good strategy. I agree with @Chris Kersey on staying 2 years if possible to avoid higher taxes if you can - welcome to the REI world nonetheless!