Rookie Investor Looking For Advice

[Niomi Lebron]

Hi Everyone, my name is Niomi and I am super new to investing and still learning.

I am a first time home buyer, and as of right now I have about 25k saved up for a down payment on a mortgage; I also have money on the side for closing costs. Currently, I live in an apartment and make 40k a year. I have looked into house-hacking but the area I live and work in (Bergen County, NJ) has duplexes well over $300,000. If I was to do a house-hack my end goal would be to move out in 2 years and rent out the unit I was in. I talked to a broker and he recommended I save another 10-15k before I apply for an FHA loan. Also, I've heard cons about the FHA loan i.e. paying for the FHA Loan Mortgage. The other option I've been looking at is investing in a 100k condominium with a 25% down payment on a conventional loan and renting that out. I've checked multiple MLS's and have found condos in that price range with low maintenance costs close by. Yet another broker stated that I should consider house-hacking instead since I will still be renting separately. If I was to go the FHA route my lease ends in October this year, and if not I could still save till my lease is up next year. Or I can invest in the condominium this year?

I would love to get advice about my options and possible more choices to do research in.

Thanks! :)

[Brad Hammond]

HI @Niomi Lebron.  I think you should run the numbers with both but I think house hacking a duplex or single-family home with an adu would be your best bet.  For the condo, figure out how much you would be making in cash flow per month compared to a house hack.  Also know that condos don't appreciate as quickly as duplexes do.  

In my opinion and depending on how risk-averse you are, I think you are closing to being able to get a house hack than you think.  Let's say you get one for $350,000 and put 3.5% down, that is only $12,250.  You can roll the closing costs into the mortgage so you don't need to pay for that in cash as well.  They do have conventional loans out there with just 3% down but they have stricter lending requirements.  

If you can in a property at these low-interest rates, I would recommend doing it.