Need advice on how to purchase my first multifamily

[Jay P.]

Hi everyone. I am looking at purchasing my first multifamily property and am not sure how to go about doing it. This is my situation. Any help would be great appreciated. I have been in my current residence for almost 4 years. I used an fha loan to get it. I was told that I can refinance my current house and then purchase a multifamily property. If I house hack it, then it would save me from putting down 20-25%. My question- is this possible? And if so, would this be the best way to go about doing this?

[Andrew Kerr]

@Jay P. - you will probably get a wide range of ideas and suggestions. I am a big fan of house hacking the multi as you will need less cash down. 

So, here is my thoughts. First, analyze your current property. Does it make sense to have it as a rental property? Maybe the numbers make sense or maybe they don't. If they don't make sense, maybe you sell and use that cash towards investing. If your current property makes sense to be a rental, then move out and rent the house. If you have good financing in place, no need to spend the money refinancing.  

Then, while you are renting a place, living with a friend or family, go find that multi-family property. Make sure it makes sense as a rental, make your offer, and get owner occupying/primary residence financing. Live in one unit, rent the rest. The really good scenario is if you can combine a BRRRR and a house hack. An example would be if you got a duplex that needed work, live in one half and fix it up. Then when the other unit becomes empty, move into that unit, rent the renovated unit at the new higher rent, then work on the second unit while you live in it. Then move out and rent the second unit at the new higher rent.

Good luck!