Looking for advice about whether to buy or rent

[Kayla Wagenmann]

My partner and I have been considering purchasing a duplex as an investment for our first home. We moved back to Minneapolis last year after living in Los Angeles for 2 years. We have been renting for the past year at $1200/month.

Sadly, I do not qualify for an FHA loan at this time because I took a second job in April that effectively split my income in half. I was informed that I need to work both jobs for two consecutive years for the lender to count both jobs as income. My total income did not change when I took the new job. I reduced my hours at my first job to take the second. I make $72k between the two jobs with the potential to make more with overtime as I'm a nurse.

A couple weeks ago, our dog tragically killed our upstairs neighbor's cat when we let him outside in our fenced yard. Our neighbor is the son of our landlord, who we have had a relationship with for the past 9 years. Our neighbors have informed us that they plan to get another cat and would be uncomfortable with us living there with our dog. They said it is "no rush" but would "appreciate" if we found somewhere else to live.

We had planned on taking the next 1.5-2 years to save money for a duplex. The idea of paying for moving expenses just to move into another rental makes me feel sick. We would likely end up spending more on rent since we have a dog and two cats and this makes finding a rental difficult.

How difficult is it to find owner financing deals? We don't have a lot of money saved up (only 2,500). I do have a personal line of credit with a 10k limit at 10% interest that I could use if needed. I also have about 20k in retirement funds that I would prefer not to tap into but would consider for the right deal. My partner and I make about 100k in combined income.

Any advice would be appreciated. Do you think it is worth our time to explore seller financing or should we just bite the bullet, find another rental, and continue to save until we can qualify for an FHA loan in 2 years?

[John Woodrich]

@Kayla Wagenmann right now it sounds to me like your best bet is to save up. You can't take a loan from your IRA accounts so the only option of tapping them would be a distribution and you may owe early withdrawal penalty. I would recommend you talk to @Scott Jensen about your investments, I would not recommend throwing them into your company plan especially if you would consider using them for your home.

I would contact @Tim Swierczek to confirm on the loan side whether he can find an exception for a low down payment loan and you should reach out to @Jordan Moorhead as seller financing may be your only solution. Can also read his house hacking book.

At the end of the day renting may still be your best option, it is good that you are saving but you don't want to be house broke and want to make sure you have money for if repairs come up.