All Forum Posts by: Austin McNichol
Austin McNichol has started 1 posts and replied 4 times.
Post: Does an FHA/House Hack Make Sense in My Situation?
- Posts 4
- Votes 3
Originally posted by @Arman Jay Tigran:
@Austin McNichol don’t make a decision by what I or anyone says here but...
I have done a fha loan on a fourplex 3.5% down. Rents from 3 units cover my expenses, while I live/renovate my 4th unit. I did have the same situation where living with my parents for free was an option, but the property was too good of a deal not to take it and move out.
There are also few things to consider:
1. You don’t actually have to live there forever. My understanding is that you are required to live there for at least 1 year. After that you can do whatever you want.
2. PMI on fha loans doesn't go away after you close 20%. It stays until the loan is paid off. So if you decide to go with fha, once you do get equity above 20% it may be beneficial to refinance.
3. Living alone from your parents gives you independence and responsibilities you might not get when you live with your parents.
All good points. I can certainly relate to #3 at times. May I ask where are you investing? The Boca area?
Post: Does an FHA/House Hack Make Sense in My Situation?
- Posts 4
- Votes 3
Originally posted by @Alex Olson:
Originally posted by @Austin McNichol:
Hello,
I am in my mid-twenties with a full time job that pays pretty well. Right now, I live at home with my parents in Central NJ. They are great and do not charge me rent or anything, so I am able to save and invest my income (right now all is going to stocks/mutual funds). I inherited a property close by that would not make an ideal rental based on the numbers, so I am in the midst of minor renovations and will sell it. So that is most of my real estate experience so far.
That said, I was looking heavily into investing primarily in Northern NJ, NYC, Philly, or even Florida (all areas I frequent for my job). I liked the FHA loan combined with the house hacking strategy to be able to purchase a property with less down, but I am starting to reconsider utilizing this strategy since I enjoy where I live and would like to avoid PMI.
So if you were in my situation with zero living expenses, would I be better off skipping a house hack and putting the normal 20-25% down in a fully occupied property since I have it laying around? Of course I'd pay below market value and probably could make some renovations. I prefer to be an active investor and will manage it myself. My end goal are larger commercial properties and I have a mentor somewhat in that arena. Thank you.
I would recommend an FHA loan on at least a duplex (best is fourplex). If you must go with a house, make sure it has a lot of bedrooms so you can rent those out. This is a great idea. Hope that helps!
Thanks, Alex. I should have mentioned that I'd go with multi family for buy and hold. No plans just to do this with a SFH. Thanks for your input.
Post: Does an FHA/House Hack Make Sense in My Situation?
- Posts 4
- Votes 3
Hello,
I am in my mid-twenties with a full time job that pays pretty well. Right now, I live at home with my parents in Central NJ. They are great and do not charge me rent or anything, so I am able to save and invest my income (right now all is going to stocks/mutual funds). I inherited a property close by that would not make an ideal rental based on the numbers, so I am in the midst of minor renovations and will sell it. So that is most of my real estate experience so far.
That said, I was looking heavily into investing primarily in Northern NJ, NYC, Philly, or even Florida (all areas I frequent for my job). I liked the FHA loan combined with the house hacking strategy to be able to purchase a property with less down, but I am starting to reconsider utilizing this strategy since I enjoy where I live and would like to avoid PMI.
So if you were in my situation with zero living expenses, would I be better off skipping a house hack and putting the normal 20-25% down in a fully occupied property since I have it laying around? Of course I'd pay below market value and probably could make some renovations. I prefer to be an active investor and will manage it myself. My end goal are larger commercial properties and I have a mentor somewhat in that arena. Thank you.
I don't buy individual stocks much anymore. I just keep buying VTI (Total Stock Market ETF) from Vanguard. I much prefer index funds for long term buy and hold. Right now, my dilemma is whether to keep buying VTI or start saving more cash for real estate. I'm not sure if real estate prices will drop much, and I'm afraid I'll miss out on good deals trying to "time the market", like some do in the stock market.