All Forum Posts by: Benjamin Sulka

Congrats on taking the plunge. I am also buying my first house hack this year :)

Sounds like you're paying less or the same that you would renting a place yourself! That's awesome and that's what the goal of house hacking should be.

Hoping that you learn a lot that can help you in your future investing.

0 Votes

Quote from @Ryan Thomson:

@Braden Jackson I recommend my clients in Colorado Springs not put down 20% even if they have it. It's a terrible investment. PMI is so cheap that you could put that extra 15-20% into a US treasury bond and have more than enough to cover PMI.

Also, It limits how quickly you can scale to the next house hack because it takes more money per investment.

It also drastically brings down the Net Worth ROI when you put 20% down vs 5%.

Braden,

This post by Ryan is fantastic and this is my philosophy as well. Paying 100-200 bucks a month for mortgage insurance is a small price to pay to be able to get a house hack with a low down payment.

If you can go the 5% conventional route, do it. FHA is still an option but you have to refi out of it to get rid of mortgage insurance.

Mortgage insurance falls off of a conventional loan at 80% LTV if you request it and 78% LTV automatically.

Maintaining a solid percentage of capital as possible should be the goal if you are looking to scale your real estate portfolio.

I'm in the same boat as you, brother. Buying my first house hack this year and learning a boat load in these househacking forums.

You got this!

2 Votes

Dallas, Texas

Andrew,

Welcome to the forums! I'm not a CPA but I did read a great article about house hacking and taxes that you may be interested in.

https://www.biggerpockets.com/blog/house-hacking-taxes

Best of luck this tax season!

2 Votes

Jacob,

This is a great question and something I have contemplated as well on my real estate journey.

My gut tells me to keep this information anonymous if you can. I've heard stories of tenants expecting the landlord to be at their beck and call because they lived in the same building.

Everyone's situation is different though and different properties attract different classes of tenants.

Good luck, man!

1 Vote

I assume what I meant to say was two FHA loans and I said two owner occ loans

0 Votes

Quote from @Vitaliy Volpov:

Quote from @Benjamin Sulka:

Andrea,

You can definitely do this! You just can't have two owner-occupant loans at once.

Either turn the Charlotte home into a rental or sell it if possible. Since you've lived there for at least 2 of the last 5 years you won't have to pay capital gains (assuming that the property appreciated) if you sell. See what turning it into a rental looks like first.

Also, have you considered refinancing out of FHA to get rid of your PMI? This is only applicable if you're at a certain LTV though.

If you want to invest in Cincinnati, get as familiar as you can with that market as you can. Talk to agents in that area, lenders, and look at properties that fit your criteria.

You got this!

Hey @Andrea Evans,

I'm going to disagree with Ben's reply on this. While it's true that you can't have two FHA loans at the same time (with some very limited exceptions), you can definitely get a new owner occupied 5% down loan, while keeping your existing FHA loan. The key fact in your scenario is that you satisfied the FHA loan's 1-year occupancy requirement. So, your options now are wide open. Yes, you can sell or refinance, but you don't have to. You can simply keep the property (and the FHA loan) and rent it out.

As others have pointed out, you probably will need to provide some justification for why you are moving to satisfy the lender’s underwriters. One reason might be because you want to be closer to a family member. Is there a reason you specifically want to buy in Cincinnati? Do you know the city well? What connections do you have there that could provide a compelling reason to move there?

Also, it’s worth “shopping around” and talking to a bunch of different lenders. Some will question your motives and intentions much less than others. I would make a list of lenders here on Biggerpockets and also google some lender options in Cincinnati and get on the phone. Finding a local bank might be a great option. But, you may also find a national mortgage broker who can find the right fit for you as well.

The bottom line is that I believe your plan is very doable. It just requires some extra effort and planning on your part.

Vitaliy

Thanks so much for enlightening me, Vitaliy! Apologies for the false information, Andrea

0 Votes

Talk to a bunch of different lenders! You won't know for sure until you actually have those conversations.

You got this man

0 Votes

Dallas, Texas

Andrea,

You can definitely do this! You just can't have two owner-occupant loans at once.

If you want to invest in Cincinnati, get as familiar as you can with that market as you can. Talk to agents in that area, lenders, and look at properties that fit your criteria.

You got this!

1 Vote

Zak,

I'm a new in a very similar situation to yourself. The steps that I've personally taken is educating myself as much as possible on the house hacking strategy in these forums.

Additionally, I got connected with a few real estate agents who have worked with house hackers and local lenders who are familiar with the strategy and aligned with my goals.

Start looking around at markets in your area and analyzing potential house hack deals to get familiar with the numbers. Then get connected with some lenders to get an idea on how much you can qualify for.

While saving up for your house hack deal (even at 3.5% down you still need a decent chunk of change for closing costs, initial repairs and sufficient reserves) put all your money in a high yield savings account like Wealthfront or in T-Bills on Public.com. Both pay around the 5% mark. Don't let it sit in your traditional bank account making 0.35%!

Best of luck and let me know if you have any questions as a fellow newbie.

1 Vote

Allentown, Pennsylvania

Quote from @Alan Asriants:

Hey Zak! What I recommend to all my first time investor clients is to start with house hacking.

House hacking is a great way to get your feet wet with REI and also getting your own roof over your head. 2 birds, 1 stone

The biggest benefit for newer investors that go the house hacking route is that they have the ability to put a minimum downpayment of 3.5% or 5% down depending on the loan program and also get access to the best rates since they are buying a primary residence

If you ever want to chat more about RE, I would be happy to do so. I started with househacking and worked my way up.

Reach out anytime!

Alan,

Would love to chat with you about your house hacking experiences sometime!

1 Vote

Allentown, Pennsylvania

All Forum Posts by: Benjamin Sulka

Benjamin Sulka has started 53 posts and replied 809 times.

Post: House Hacking with Multi-Family Home

Post: Househack Financing Advice

Post: First Tax season House Hack

Post: Should I Tell the Roommate that I'm the Landlord?

Post: Can I Do This??

Post: Can I Do This??

Post: Income Verification requirements

Post: Can I Do This??

Post: Intro - Just starting out

Post: Intro - Just starting out