Purchasing home in Oregon

[Jacob Trimble]

Hello BP, 

My wife and I just got out of Active Duty. I'm currently working as a pilot (I also have my RE license and am trying to do that whenever possible) and my wife works as a nurse. I have utilized all of my VA Loan as we currently have 3 investment properties 2 of which are under the VA loan. Therefore, my wife and I are looking to do an FHA loan to purchase a property at 3.5% down because we don't have enough saved yet for a 20% down payment.

I'm torn because I've always been, like most people, wanting to buy rather than rent. My mindset of purchasing property is sort of a hybrid between finding a good home and making it a potentially good investment. I've always bought property that could rent for more than what the mortgage would be. 

Currently we live in McMinnville, OR. The rough median house price for an Oregon home is $500,000 which with our income we could do. However, using an FHA loan at 3.5% down would put our payment close to $4,000/mo. For the same house, it could rent for probably $3,000/mo. I'm very familiar with house hacking but we have a daughter now so I don't want roommates and I have not yet found a duplex or anything of that sort for less than $6-700,000.

I'm not trying to time the market necessarily or anything like that, but it's such a weird time to try and buy. Everyone bought when interest rates were record lows, those who already had a home refinanced into a better rate, and mortgage rates have over doubled now. So not only is there low inventory, but I feel the prices, especially in Oregon are overpriced. That being said, is the best option to just continue to rent for possibly years to see what happens or is there a better scenario we may not be seeing? Hopefully, I gave the correct amount of information to properly analyze this situation, if not let me know. I appreciate any insight.

[Hunter Reed]

Jacob, thank you for service and congratulations on your other investments. If I were you I would look at all possible solutions. The first solution that I would seek out is to use the FHA loan and look for ways to turn a basement or garage into a unit. Make sure your budget allows you to do this. Rent out the backyard/yard for trailer/RVs. Think of as many creative solutions as possible. Another possible solution I would pursue is the equity in your other 3 investments. You could acquire enough money to put down on a bigger investment which would allow you to rent more units while living in one. Don't be torn. I would ultimately utilize the FHA loan to fund a property while simultaneously looking for other ways to creatively add value to pay down the mortgage. Good luck on your journey.