Move into an apartment, or do a cosmetic rehab on a SFH? Advice Appreciated!

[Thomas O'Donnell]

I am currently house-hacking a duplex, but my portion of the mortgage/expenses has been draining me and is too much for my liking. I bought this duplex with 0% down at a 7.5% interest rate in September 2022. The other side is rented out below market value but that lease does not end until 03/2024. I would love some input on what I should do.

I have been strongly considering moving into a small apartment and renting out my side at or close to market value. Even though this would save me around $500 more per month, I am worried about being stuck on a 1-year lease if I were to come across another deal to house-hack. Ultimately, I would love to move out, rent my unit and get a SFH that needs cosmetic upgrades so I could live there and fix it up while I do for a year or so. The only thing stopping me from doing this is that I do not have the funds for a 3.5-5% payment on an FHA loan (or a FHA 203k loan to help with repair costs).

Without having funds for a down payment, I feel like I am forced to go the apartment route. Does anyone have any tips or know any lenders that could help with little to no money down on a an FHA loan; so that I could live in a house and add value through cosmetic rehab while I do? I appreciate all and any responses! Please ask questions if I was not clear enough, thank you!

[Scott Crowley]

Hey Thomas!

I can see the hard spot you feel like you're in right now. I know it may seem like there aren't many solutions, but honestly, this is where creativity comes into play in this industry!

Glad you took action, but zero down at 7.5% is rough and making your hack a little tighter than it could be, but you know that better than I do. What I would do from here is focus on how to "creatively" purchase your next primary residence(you basically want a live n flip it sounds like but it can be another house hack that pencils better too!). 

Basically, I'd ditch the whole conventional financing system and make a deal on creative terms. You'll create more possibilities and opportunities that way without question. You'll also have the ability to put little to no money down as well.

Private money is literally everywhere. Put yourself out there BEFORE you need the funds so you have someone in your pocket when a deal presents itself. 

Reach out of you want to chat. I hope this is helpful!