What are my options...

General Landlording & Rental Properties
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What are my options...

Armand P.
New to Real Estate · San Mateo, CA · Member since 2015 · 127 posts · 12 votes
Hello BP,

Need some clarity. I recently did a cash-out refi on my primary with the intent of using the funds to buy a second home with my partner and kids. We are currently renting and the original plan was to have my partner apply for a loan and her and I be on title since I already own a home and wouldn't qualify.

Our lease is up in May, however, we just found out that a family member might be moving in with us temporarily and she may need to extend the lease. This creates an issue b/c without her applying for a loan it leaves me searching for other alternatives. One of which i can use the funds to purchase an investment property/fixer upper,however, can I and my family live in it OR does it need to be renting out? Another option is to rent out my primary, but since i just refinanced I'm not sure if thats an option.

Anyone with ideas or thoughts on this especially legal advice would be much appreciated.

NOTE: The reason why I am not selling my primary (although have considered it) is due to some unexpected legal issues that i need to address. Furthermore, if i am able to rent it out it would more than cover all my mortgage expenses.

Thank you
Armand


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  • Kyle J. CooperPro Member
    Investor · Corpus Christi, TX · Member since 2019 · 71 posts · 43 votes
    5y

    @Armand P.

    I'd rent it out if you can, that solves your current issue of paying for two places(your primary and the place you're renting) and gives you cashflow for the future! Depending on the amount you refinanced you could take that money use it and do a live in flip, you could buy a cheap property with cash and do a BRRRR(recycle the money you refinanced), or you could even do a house hack since you and your partner could technically "live" in two places. You just need to ask yourself based off your current situation, what's the best path forwards where you come out on top and potentially with some income-producing real estate! Hope this helps. Cheers!

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  • Armand P.
    OP
    New to Real Estate · San Mateo, CA · Member since 2015 · 127 posts · 12 votes
    5y
    thank you for your response. So, even though I refinanced my primary I can still rent it out since its not considered an investment? In other words is there a 6 to 12 month waiting period before you can rent out a primary resident?

    In the above scenario do we need to invest in either a duplex OR a house that has an in-law unit to show that it's a partial investment?

    Rules might be diff in California where i am than in other states but its good to hash out these ideas
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  • Julie MarquezPro Member
    Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
    5y

    @Armand P. Ask for a month to month rental agreement to extent the stay

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  • Kyle J. CooperPro Member
    Investor · Corpus Christi, TX · Member since 2019 · 71 posts · 43 votes
    5y

    @Armand P.

    This is not legal or financial advice so you should do your due diligence, but yes there are ways for you to rent out your primary residence. 

    Also you can "house hack" a duplex or single family home (live in one room and rent the other rooms). Do a little digging and you'll find there are many owner-occupied loans available with low down payment options(FHA is a popular one). Some states have restrictions concerning multiple un-related people living under a SFR, so definitely check on that if considering the rent by the room strategy.

    There's multiple ways to house hack as you already mentioned a few of them. Duplex rent one side live in the other. Buy SFR with an ADU or mother-in-law suite and rent one of them out. Or other creative ways to move forward(SFR where you have one long-term tenant and rent out one of the rooms on Airbnb/VRBO). Lots of options!

    I'd read or listen to The House Hacking Strategy by Craig Curelop and/or listen to some podcasts on successful house hacking but that seems to be one of the most popular options among individuals jumping into real estate

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