Owner Occupancy - What Is, and What Isn't?

[Robert Leonard]

A friend of mine and I were having a discussion about his current situation the other day, and I'm curious to hear others opinions, specifically those active in the BP forums. 

He currently lives with his girlfriend and 6-month old baby in their single-family home, which they bought in April 2018. He wants to get into real estate investing with the little money saved that he does have. I told him to look at house hacking a multifamily property, but his girlfriend doesn't want to live in a multifamily property. 

He was wondering, once he has lived in his single-family for more than one year, can he purchase a 4-unit multifamily property as an owner-occupied property, if he just changes his legal address to the new multifamily property but doesn't "live there"? Since the property would be in the same town/state as his single-family residence, changing his driver's license/mailing address/legal address wouldn't be a big deal. He was saying the new property would be his "legal" home, and they'd just have a second house (the single-family residence where they currently live). He would make sure that he DOES NOT rent out one of the four units, to keep as "his unit". He also said that if the other three units at least broke even (or made a small profit), that'd be fine for one year, at which point he could rent out the fourth unit and increase his cash flow.

We talked a bit about this, but I wasn't sure what advice/guidance to give him. This seems to be somewhat of a "gray area". What do you all think?

Robert Leonard

[Andrew Flora]

Mortgage fraud is a felony, I wouldn't recommend the risk. Although he would likely get away with it, I would never recommend it.

Best route is to pitch the financial benefits to his girlfriend and actually live in the 4-plex. If she refuses to acknowledge the benefits that are clearly best for their future maybe he should consider finding a new girlfriend and moving to the 4-plex himself.