Multifamiliy Househack vs SFH New Construction w/ discount

[Jesse Wolf]

I am faced with two options atm. I can either househack and owner occupy a 3-4 plex w/ FHA 3.5% down, or I can get a brand new construction home with a 10% discount. With the SFH I'd put 5% down. My credit is good, my MI on the SFH would be extremely minimal (less than $30/month)

I am pre approved for either scenario and currently living with a friend. I just rented out my previous SFH and moved to the Northern Seattle area.

Cliff notes:

-I'm in the Seattle market

-My discount would get me approx 40-45k in instant equity with the SFH

-Any 3/4plex I'd buy looks like it would not cash flow, at least not initially. I'd be paying somewhere around 1k a month to the mortgage from my own funds, however thats on a 750k-1mil property.

What are your thoughts, and which would serve me better long term?

Thanks BP!

[Michael Haas]

Hi @Jesse Wolf - sounds like you’re newer to Seattle? If so welcome!

We’re definitely in a appreciation market more than a cash flow market, but also South seattle is much better for cash flow properties than north. As broker & buyer I just offered on a home in north beacon hill with great rental numbers that needs a rehab today, and have been eyeing a turnkey property in Georgetown too. If you haven’t already been looking here I’d recommend it! I used to live in north seattle and absolutely love the south end now, you can get way closer to downtown and not have to deal with crazy north seattle density and prices...

Send me a message if you’re interested in talking about the numbers we’ve been seeing down here in more detail. Without more info I’d say keep looking at multi-families- there are ones that cash flow with an owner occupant here, just need to chose carefully and be patient. Cash flow will fund your next deal, but instant equity in your home without cash flow doesn’t count for much besides a higher tax bill.