FHA Loan v Partnering on a Conventional Loan (House Hacking)

[Sam Giberti]

Hey BP, it has been a little while since posting on the forms, anyway its late so I'll keep it short and sweet. 

In 2 years or less I will be putting a DP on a duplex, triplex, or quadplex and more than likely be living in the house as well. Essentially house hacking it. Yes I realize it is easier said than done, but I continue to learn and research everyday. Anyway, when the time comes, what would be a better move in your opinion?

3.5% FHA Loan and take the PMI which I really feel strongly against, however if the opportunity is there, and I can get a good deal under my name alone, I may take the good with the bad and lock in a low interest rate while they're still available.

Or would it be more ideal to really save cash, avoid the PMI, partner with someone, essentially someone who I would share a unit with. And share the name on the note. It could be helpful to have someone to do this with, however I find it quite rare, finding people my age (18) who even give the slightest f about what I love to study... lol.

Thanks guys, have a great night. Assume the prop.  is somewhere between the $150k-$250k range.

[Tim Herman]

@Sam Giberti why are you against PMI? This to protect the bank if you walk away from the property. On $200000 property you will put down $7000 (your liability) the bank has $193000 to protect. It is only a cost of doing business. House hacking is the least expensive way to get an investment property. Conventional financing 20-25% down. Even if you did 5% down owner occupy for the same cash outlay you can buy 4-5 properties. You move every year for 10 years (only have 10 conventional mortgages) you can accumulate 20-40 units for same cash outlay for 2 conventional down payments. The only extra costs are the closing cost but you always ask for the owner to cover. I would house hack if i was starting over. Yhey would be in my name and not have to share any profits.