Minor hiccup, what would you do?

[Mitch Kennedy]

Hey Everyone,

I've been looking at house hacking a duplex in the Twin Cities area, mainly near St. Paul, with the intention of putting 3% down (There's a credit union through my work that offers this program without PMI.)

I'm currently renting in Minneapolis and paying over $1k a month so I'm trying to get out of this situation ASAP. I had a meeting with the mortgage lender today to be pre-approved and found out that the 3% is only offered on SF and a duplex requires 15% if you don't want PMI, 5% down adds PMI.

I want to get out of renting so it seems my options now are:

1. Buy a SF home to use as a live in flip (also been searching for 2B homes over 1k sq feet for the potential to add another bedroom)

2. Lower the price range I'm looking at for a duplex (it already wasn't too high) in order to take the 5% down payment with PMI

3. Keep saving until I can comfortably afford 15% down on a duplex

Thanks all!

[Alyssa Strom]

@Mitch Kennedy I'd stick with option 2 and just be patient in your search. Although no one likes paying PMI (myself included), it allows you to get into an investment property far more quickly. Like @Tim Swierczek mentioned paying rent while saving for a down payment on a future duplex seems to defeat your ultimate goal of house hacking now. It's definitely competitive out there but I've seen some decent options under $300k. I walked through two duplexes this week in the $230-$250k price range where it was mostly cosmetic work that was needed. Plus the potential to add equity given you're only putting a small amount down is an ideal situation.