Should I house hack or buy the house of my dream?

[Abhimanyu Rajora]

My neighbour located in WA is around 48 years old and has worked as an employee his whole life. He wants to retire in the next 5 years or earlier. He's tired of having lived in rented condos and has had a dream of buying a residential house 5-bed 3-bath. He's an accredited investor and earns $400K from his job and is considering  buying a house worth nearly $2M and is considering putting 20% down for it and paying it off over 30 years.

The dream aside, does this transaction make long term sense? Are there ways to qualify for an FHA loan for a lower down payment?

What would be the best outcome of this situation (in monetary and lifestyle aspects)?

If you were in this exact situation, what would you do? is it too late in life to begin house hacking? what are your thoughts?