First Purchase - House hacking in Austin

[Taylor Ullmann]

Hi All, 

I have started looking around Austin for a place to live after graduation this spring. For the past four years at UT, I have been renting, paying +$850/mo to share a room  in a five bedroom home near campus. Since I will be starting a full-time job in Austin, I decided to look into making an investment here, rather than paying over $1000/mo for a single bedroom apartment. 

My plan is to purchase a 3-4 bedroom home, living in one room and renting out the others to my friends for a year, then likely moving and renting it out entirely. I have saved enough money from internships/work for a 10% down payment; however, my parents are looking to invest as well. 

At this point I'm curious on hearing feedback about smart tactics for financing the home. I'm not sure how it would work if my parents invested and then I paid them back after starting my full time job. I also looked into an FHA loan, which is appealing due to the low down payment, but I don't believe I would be approved since I do not have a history of two-years of full-time work yet.

Excited to hear your ideas and advice! 

[Joe Scaparra]

Originally posted by @Taylor Ullmann:

Hi All, 

I have started looking around Austin for a place to live after graduation this spring. For the past four years at UT, I have been renting, paying +$850/mo to share a room  in a five bedroom home near campus. Since I will be starting a full-time job in Austin, I decided to look into making an investment here, rather than paying over $1000/mo for a single bedroom apartment. 

My plan is to purchase a 3-4 bedroom home, living in one room and renting out the others to my friends for a year, then likely moving and renting it out entirely. I have saved enough money from internships/work for a 10% down payment; however, my parents are looking to invest as well. 

At this point I'm curious on hearing feedback about smart tactics for financing the home. I'm not sure how it would work if my parents invested and then I paid them back after starting my full time job. I also looked into an FHA loan, which is appealing due to the low down payment, but I don't believe I would be approved since I do not have a history of two-years of full-time work yet.

Excited to hear your ideas and advice! 

 Great Idea Taylor but a few things you need to know.  If your owner occupied you can get into a home with 3-5% down vs an pure investment property (not owner occupied) requiring a minimum of 20% down.  Also no lender will give you a loan without demonstrating an income source steady enough to make the monthly payments.  This is where your job comes in.  If you want to act fast without the benefits of being able to show steady income then you might be able to secure  a loan if you have your parents or someone who trust you co-sign the loan with you.

Now here is another idea.  Instead of buying a home, the direction most people go when buying their first home, be different and wiser, buy a duplex!!!!!!!  Your house hacking idea is right on but do it with a duplex!!!!  Rent out one side for around $1200 month and rent out of your bedrooms on your side for 500-600 month and you will be living free or a cost not to exceed $300.  If you do this for your first purchase you will unleash the secret to become WEALTHY beyond belief!!!!!

A duplex in the Austin, metroplex will be easy to keep rented.  If you don't want to live on one side later, no problem move out and rent that side for 1200 or more and let the duplex pay for itself.  The benefits of renting a duplex over a house are so overwhelming better that  even in a real estate downturn your investment will pose little worry. 

Your desire to house hack at such a young age shows your intellect and maturity, but to do it with a duplex will blow people away!!!!  Good Luck!!!!