First timer looking for house hacking/strategy advice!

[Taylor Bride]

I am brand new here and working on a strategy to purchase my first multifamily property. I am working on a 6 (ish) year plan and am hoping to get some feedback/advice. I’m fairly young and don’t personally know any real estate investors, so this site is a major goldmine of information for me.

For background - My husband and I currently own a home in the Tacoma area of Washington – We bought in 2011, and have done various improvements to the house, so we have a decent amount of equity built up (120k). I started reading about house hacking, and it looks like a viable option for us to get our foot into the door of investing.

My first question: We don’t necessarily want to sell first and then look for a new property as we have two young kids, but I doubt we will get anywhere with a contingent offer on a duplex – our real estate agent agrees. We need the equity for our investment plans, so keeping it as a rental is not an option. Does anyone else have feedback on this? If we have to sell first then rent to move forward with our plan, then it is what is, but I’d like to avoid that if possible.

Our ultimate goal is to own 2-3 rentals before we buy or build our forever home, so here comes my second question;

Our lender is recommending a 5% down, conventional loan for our first duplex. This low down payment will allow us to keep most of the equity from our first home, so that we can eventually invest in a second duplex. Our plan is to stay in the first duplex for 2 years, then find another multifamily to purchase. We would keep the original duplex as a rental, then move into duplex #2. BUT our lender is saying that even though the second duplex would be owner occupied, we would need 20% down. When I asked her why, she said that the underwriters would have a hard time actually believing we were occupying it… but we would be. It was very confusing to me and is throwing a hitch in my 6 year plan.

Is she correct, or could I get another 5% down conventional loan, or another similar type of loan?

Onto question #3 (hopefully I haven’t lost you guys 😊) we definitely want to house hack for our first multi-family, but after the response I got from my lender about the second property being 20% down, I started looking into other options. I came across an article on here about vacation rentals and how they can be a smarter option. Would this be a smarter move to look into, rather than househacking a second property? I wouldn’t be able to hack a vacation rental, so the down payment would definitely be higher. But if it’s a smarter investment in the long run, it would be worth looking at. Thoughts?

Thank you all in advance – and please if you can, be easy if I sound like an idiot. I’m inexperienced in this realm and am just looking to get my foot in the door.