Buy duplex later or buy single family now

[Som Jafari]

Hi everyone,

I'm trying to buy a duplex within the $750,000 range to house hack in Oceanside/north San Diego area.

I'm already pre approved for $800,000 loan but I only have $40,000 cash. I can't get an FHA loan because none of the sellers accept that. For the properties I'm looking at I'd need $22,000 for closing costs and mortgage company fees. So I'm short by $18,000. Should I keep the money I've saved up until now and keep saving until I have around $58,000 and try duplex later? Raising $18,000 would take me about at least 2 years. 

Or should I buy a $174,000 single family house (which I can afford now) while the rates are low and rent it out? ? What would you recommend?

[Dan H.]

Your binary choice is what I have issue with.  

I believe you can find duplexes that take FHA because I keep hearing about agents who are finding properties for their client that are being purchased via FHA in San Diego. If your agent cannot find any of these, maybe you have the wrong agent (I am not an agent, but there are agents finding FHA purchases of duplexes in San Diego area).

Second, there are many other purchase options: seller financing, subject to, lease to own, in-house loan, private money, etc.

Finding a $174K house in Oceanside or North San Diego will be harder than finding a duplex that takes FHA or owner financing. Maybe there was a typo on the price you entered. Also if you have $40K and purchase a SFH via FHA at 96.5% LTV, you should be able to afford significantly more than $174K. Maybe you need a different mortgage broker also. They should be providing you guidance on what you can qualify for with the various loan options for the various purchase options you are considering. My mortgage broker, I like a lot, but his strong point is not holding ones hands through the process otherwise I would recommend who I use. I am sure there are many lending specialist that could provide you the guidance that can help.

Good luck