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Updated over 5 years ago,
Primary Residence Vs Out of State Multi
Hi BP,
Im newer to BP and look forward to becoming an active member of the community. I currently am in the situation where I am looking at either buying my first primary residence home, living in it and renting out the extra rooms house-hacking and living for free, or buying a multi family out of state. I currently live in Salt Lake City Utah so a multi family in Salt Lake within the radius of where I need to live for work is a little out of the question. My question is I have about 20k of capital which would allow me to get either a ~300k home in SLC and use my capital for the 3.5% down payment and closing costs or use the capital for a 20% down payment on a ~100k out of state multifamily that will cash flow. I currently have a good living situation and only pay 500$ in rent so my rent is not high. In Salt Lake I have found houses in my area and price range with 4-5 bedrooms so I'm confident between friends and rental websites I would be able to cover the mortgage and house-hack that way.
My first big question is which option do you see helping me achieve financial independence quicker? If I get a primary residence mortgage it would have me close to maximizing my DTI I don't think I would be able to qualify for another mortgage for at least a couple years.
Are multifamily homes mortgages calculated the same way? Or if it is an investment and income generating asset could I qualify for another mortgage for the out of state home a couple months after purchasing the primary residence?
Is it worth continuing to pay rent at ~$500 a month for an out of state multi? My goal would be to find a multi that would at at least cash flow $500 so that I would still be living for free and could save that money for another property.
I would love to have my own home and build equity in it with other people paying my mortgage but am unsure if this is the best and quickest path to building a solid real estate portfolio in the coming years.
Any help answering these questions would be much appreciated as I am not sure which direction to move in.
Thanks!