"House Hack"/Rent or Sell

[Sean Iago]

I purchased my first home in 2011 and currently still hold it as my primary residence. It's subject to a 3.875% interest rate on a 30 yr FHA note. Being the FHA loan, my initial down payment was 3.5%. It was a lightly distressed HUD home that I renovated and generated a fair amount of equity in the home. My wife, a Realtor, and I are in our early stages of personal real estate investment. We currently own 3 homes (subject to mortgages), 1) our primary residence, 2) a flip in progress, and 3) a rehab that we are moving into.

We would like to build a diversified portfolio of passive and active income with the rental and flip properties. We planned on "house hacking," and utilzing our primary residence as the first rental property. Our primary residence is one of the largest in the neighborhood, and also one of the nicest; therefore, we are struggling between the following options:

1) Selling in a low inventory environment and realizing a cash payment ~$65,000-70,000 with a ~$50,000 profit margin

a. Exiting with significant margin and utilizing cash for various items (Paying down primary residence mortgage, utilizing cash on hand for future financing of flips/rentals)

2) Renting and cash flowing ~$300-$400

3) Option 2 and utilizing the home equity as leverage (potentially through a HELOC) for investing in another rental or two

All suggestions and ideas are welcome.

Best,

Sean