If you were househacking and your rental income covered your mortgage (which includes a $400 PMI), would you quickly payoff 20% of the loan to eliminate the PMI (saving you $4800 annually) versus buying out of state turnkey properties for $20k out of pocket (downpayment + closing costs) that cashflow roughly 200-300 a month then refi.
it will take 5 years to pay down 20% of the mortgage @ $20000 a year.
i am thinking that (ideally) biting the bullet for $4800 annual PMI payments will be offset on the 2nd year when you have bought the 2nd turnkey property and cash flowing $400-600 + appreciation.
@Patrick Lim If you are looking at buying a $20K house, I'd be very careful. They are going to be a lot of work (and check out who is selling it as there are some scams out there-Morris Invest is one).
If it was me, I'd use it as a down payment on a second rental in a good area.
If you are house hacking and it's covering your Mortgage Insurance, I'd pay that down quicker so you could net that extra $400 a month, that way, you are living in your house and you are making an extra $400 a month, Then I'd either save up, or, I'd buy another house with an FHA loan, rent out the room you're living in now, and go move into your new house and house hack that one as well. The house you are living in now turns into a rental, and the next one will have a low downpayment, and you'll have people renting out rooms there as well freeing up more money for you. Just my thoughts.