House hacking with FHA

[Shane Boyle]

Hi everyone, been trying to determine a way to get into buying a multi family ASAP but with low funds and no track record to reach out for OPM ect. Trying to house hack with a low 3.5% down with an FHA loan seems like the move to

A) get started

B) begin building credibility

BUT, when taking out an FHA loan you need to reside there. I've "heard" you could live there for a year and then go some where else however you can't pull out another FHA loan with the exception of moving somewhere to work or having an increase in family size.

Any advice on what a good way to start is with no real capital to your name (to BRRRR) and no credibility to raise money?

Thanks Guys!

[Scott Trench]

Hi Shane - yes, you need to live in the property for at least a year with the FHA loan. But, it seems to me that this is no more of a commitment than signing a lease where you have to live there for a full year...

My advice would be to focus on saving, saving, saving for this next year. If you can come out with $10,000 - $15,000 in cash, after-tax, in you bank account, BEYOND the amount that you will be putting down on the property (the 3.5% down PLUS $10K cushion), you are probably getting to the point where you can make a house-hack purchase where the risk/reward is in your favor. 

Investing in real estate with your own money and from a position of financial strength is, I believe, a far more rewarding experience than leveraging other people's money and being dependent on a positive outcome to keep you afloat. 

I'd suggest it's personal finance for the next 12-18 months to put yourself in the position to do this the right way.