Newbie seeking advice for buying his first house in Austin, TX

[John K.]

Hi, 

I work remotely and can live anywhere in the US.  About a year ago, I decided to move from Kansas to Austin to see how living here feels, which I've liked so far. Now, I am planning to buy my first property, but I am not sure which part of Austin, and whether to buy a single-family or duplex (if I could!). I am thinking of house hacking. One advantage that I have is that two of my current roommates agreed to move with me when I bought my first property. They can give me around $1500-$2000 for rent together depending on the house. 

A little bit about myself. Single male, in my 30s, have made $85K on average for the last 2 years, 0 debt, my credit score is around 805, cash is around $40k, 401K is around $11k, can save $2.5k per month and currently pay around $900 for a furnished room (with all the utilities it gets to around $1000). 

My questions:

1- Cash flow doesn't matter to me. I am currently paying around $1000 for rent. If I can find a house for which I only need to pay this money out of my pocket, I will be happy :). Therefore, my focus is on appreciation. So, which Autin neighborhoods or suburbs fit my budget and have a better chance of appreciation? 

2- Do I have a chance to qualify for a duplex with my current salary using FHA loan? There are duplexes in the $500K-$550K range that I think I should be able to qualify with around 3.5 percent down, a 6.4 interest rate, a worst-case scenario of $1500 projected rent income for the other unit, and a 0.5 debt/income ratio but I am not sure if it is possible.

3- In general, for a first-time home buyer, do you suggest a single-family or a duplex? 

This is my first post in BiggerPockets. Thank you all for your help :)

[V.G Jason]

1) Your price point will dictate what areas you can go to. You can find something solid, but nothing outstanding but that should be expected. You will not get to choose this with your situation. I would look at houses sub $450k, and your options will be east of 183, just south of 290 and some fixer-uppers in East Austin. You could go north and sort of towards Round Rock, but I am not too familiar with those areas .

2) You'll need to talk to a lender, but take into account property taxes here. They're atrocious so you're P&I may be okay, your T&I may be rough. At 3.5% percent down, your P&I would be very, very high. 

3) Both. Honestly, a SFH will likely appreciate better-- and you can rent by the room. So a different way of house hacking. But I'd get the best property in the best location that you can reasonably afford, and not limit your choices.

The no debt, credit score, etc., is going to be very helpful for this. Take into account you'll also need some reserves set outside because you're now managing a house-- so dishwasher, HVAC, etc., all that stuff fixes and repairs need to happen. Plus, if you need your roommates income to survive it's best you earmark money for that, too.