Thinking about renting out current SF and House Hacking a MF...

[Ray Fajardo]

Hi There,

Located in the North Central / Central Fl area and bought a SF about a year and a half ago, no real equity yet. Considering renting it out, ideally it cash flows since we have a fixed 2.75% 30 yr fixed, or at least pays itself while my wife and 2 toddlers house hack a 4 plex. Would ideally like a bigger than 4 unit MF to start, for the sake of cash flow. Thoughts on getting larger than 4 plex for our first REI?

Thinking it would be best in our situation to get a low down payment loan, fha or otherwise.   

Would there be financing advantages to getting more than 4 units, ie: counting rents as income to qualify for a higher purchase price/loan?

Any advice or critiques or first hand experience on doing similar to this plan?

[Nick Velez]

@Ray Fajardo

Keep in mind that with FHA loans, 3-4 units have to pass the self sufficient rule. The remaining income from the other 2-3 units has to cover your PITI, otherwise it fails.

To use rental income from your primary residence, FHA loans require that your new primary be 100 miles away from the new one. If it is not, you will eat both PITI payments and likely not qualify unless you have sufficient income.