Is This Plan Financially Feasible? Northeast Multi-Family, then Move South?

[John Winters]

Greetings BP ~

I am hoping to receive some feedback on the financial feasibility of this plan and/or some tips to improve it.  Thanks in advance.

*I currently live in the Northeast (U.S.).  I plan to purchase a primary residence, multi-family home (2-5 units, 'house-hack').  It will cost less than $150,000 and will need moderate renovation work.

*Soon after, I will be moving to the South, where I will purchase a relatively moderate-priced home (less than $350,000), likely a single-family, possibly a duplex.

~ I will most likely purchase the first home (multi-family) using a bridge-DSCR loan combo or a FHA203K (3.5-20% down). I would like to do the renovation work myself and hire skilled tradespeople when needed. The rental income from the first home will pay for the mortgage/monthly costs. THEN, I plan to purchase the second home using a FHA or conventional loan (3%-5% down), for which I will likely pay the monthly cost out-of-pocket, maybe with some rental income support if it is a duplex.

My concern is, I do not want to spend my savings or weigh down my debt-to-income ratio so much so that I cannot qualify for and pay the down payment and closing for the lending on the second home.

Questions: 

- With the first home being multi-family, 75% of the rental income (or potential rental income initially) will relatively either maintain or boost my debt-to-income ratio from lenders' perspectives, right?  Again, I do not want buying the multi-family home to block me from accessing lending for the second home when I move.

- Does anyone see any flaws or can offer some improvements/considerations to the financing strategy of this plan? It has BRRRR aspects to it. (For example, IF I was able to purchase the first home (multi-family) outright, paid-in-full, then use a HELOC to pay for the down payment and closing costs for the second home, would that be a smarter approach?)

- Will lenders likely make me wait more than 1-6 months from closing on my multi-family, to approving lending for the second home? (My credit scores are solid.)

Thank you in advance for any feedback. I appreciate it.

john

[Obed Calixte]

For the first purchase- the home can not be your primary if you intend to use a DSCR loan. DSCR/hard money are non owner occupy loans.

If you decide to do FHA203K for the first home - a 203K consultant/inspector will be required for the standard 203k loan, you will unlikely be able to serve as GC and you sign a 1 year occupany affidavit.