House Hacking a Multi-family Property or Single Family Home?

[Cade Olof]

I am looking to purchase my first rental property in the Tucson, AZ area. I recently have just backed out of a multi-family 4 plex unit because of lending difficulties. My lender whom I trust, was certain that the underwriter would not sign off on my loan because I am having my parents co-sign with me so that I become eligible to purchase. However he felt the underwriter would not sign off because my income would not support the purchase even though my parents debt to income ratio would’ve allowed the purchase. My lender is now informing me that we would be able to purchase a single family home at the same price and I could house hack the bedrooms however I am an agent and do research in my area and find that it is difficult to discover a single family home that will cash flow as well as I want it too. The multi family properties I am finding seem to cash flow well... my dilemma is now that I can not obtain financing on a cash flowing multi unit that’s available but I can obtain financing on a rare cash flowing single family home. Should I try and find a private lender who would be more willing to approve financing on a multi family or should I wait to find the perfect single family cash flowing asset? Any comments and advice will help. Thanks!

[Andrew Kiel]

Single family can still be a great way to go in my opinion.  If you can get a conforming loan in the 2% range for owner occupied or an investor rate in the 3% range the numbers will work on the right house.  We are still buying homes on the East and South sides of Tucson that can cash flow $500-$700 per month.  I know the numbers work a little differently for an owner occupied house hack - but they should still work very well IF you find the right house.  The key is pay a little more for the 3-4 bedroom homes with some extra square footage - don't go too small (or too cheap).