House hack suggestion/advice

[Courtney Mccrear]

Hey how’s it going everyone? Could someone please give me some advice?

So I'm trying to scale up and acquire more doors, I have 2 rentals I've acquired through tax deeds already but I'm currently stuck trying to get to 3. I'm ran into a hiccup in my current primary home! I used my Va loan to acquire this home with hopes to BRRR after this year, I refinanced and started on the rehab but got ahold of a bad contractor (all my fault) and he beat me out of 35k. I have about 50k in equity but I can't tap into it because of my dti ratio on my credit is too high. The downstairs is basically unfinished because of the contractor, but at this point I don't mind selling my primary or doing a lease option. I would like to sell my primary home and acquire a multifamily to house hack.

Any suggestions?

[Lawrence Potts]

Quote from @Courtney Mccrear:

Hey how’s it going everyone? Could someone please give me some advice?

So I'm trying to scale up and acquire more doors, I have 2 rentals I've acquired through tax deeds already but I'm currently stuck trying to get to 3. I'm ran into a hiccup in my current primary home! I used my Va loan to acquire this home with hopes to BRRR after this year, I refinanced and started on the rehab but got ahold of a bad contractor (all my fault) and he beat me out of 35k. I have about 50k in equity but I can't tap into it because of my dti ratio on my credit is too high. The downstairs is basically unfinished because of the contractor, but at this point I don't mind selling my primary or doing a lease option. I would like to sell my primary home and acquire a multifamily to house hack.

Any suggestions?

Selling might be your best option then. If you decide to sell, that opens up your VA to purchase a 1-4 unit and start your house hack. You may find difficulty selling with an unfinished downstairs. It may not be considered financeable; that diminishes your buying pull to investors or cash buyers willing to take on a project. But I understand where you are coming from. We sold our first home to get into a 4plex. We had about $40k in equity but $10,500 was tied up as a 2nd lien from a down payment assistance grant and we couldn't refinance our equity because there wasn't enough and couldn't get a HELOC because the 2nd lien position was taken. So selling was our best option.

If you've lived there for 2 of the most recent 5 years, you can defer on your capital gain taxes you'd experience (again, speak with your tax and legal advisors). If you're able to finish the downstairs on your own, that'll be the best way to maximize your profit and then use that to purchase your house hack! That's what we did. Best of luck! Hope that helps. Not a bad strategy at all :)

What would it look like if you took your time and finished the downstairs and then sold once the rehab was completed?