New investors in the Washington County, MD area!

New investors in the Washington County, MD area!

Member since 2022 · 3 posts · 3 votes

Hello BiggerPockets!

My name is Marshall Hoffmaster and my wife and I plan to start our REI journey at the start of 2023! We are looking to start out in our own backyard within the Washington County area of Maryland, more specifically, in the city of Hagerstown. Currently, our goal is to use an FHA loan and buy a 2,3,or 4-plex to-house hack, or at least that was our goal when we started our journey at the beginning of 2022. As we have worked towards saving and educating ourselves more, we are wondering if starting out with a house hack will be the best use of our efforts. Our biggest concern with this, and many of you may know where I am heading, is we are unsure as to how we can proceed thereafter. Once we use an FHA, we are left pondering how to further scale without spending an enormous amount of time saving for a larger down payment. We have been reading more about BRRRR as an alternative way to start as well as wholesaling as a means to raise capital. However, we feel as though those topics may be for more advanced investors. Therefore, any advice would be much appreciated, and I am also looking forward to connecting with any investors in my area!

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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
3y

@Marshall Hoffmaster Welcome to BP.  

Buying a property to live in and House hack is perhaps the best way to get started.   The best way to get to your second deal is to get the first one done.

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    3y

    @Marshall Hoffmaster Welcome to BP.  

    Buying a property to live in and House hack is perhaps the best way to get started.   The best way to get to your second deal is to get the first one done.

  • Member since 2022 · 3 posts · 3 votes
    3y
    Quote from @Ned Carey:

    @Marshall Hoffmaster Welcome to BP.  

    Buying a property to live in and House hack is perhaps the best way to get started.   The best way to get to your second deal is to get the first one done.

     Thank you @Ned Carey for the encouragement! I never thought about it that way! 

  • Lender · Baltimore MD · Member since 2015 · 201 posts · 66 votes
    3y

    @Marshall Hoffmaster I agree with Ned. That is how a lot of successful investors have started. 

    To answer your question of what comes next... you can refi into a conventional mortgage after 12 months and do the same thing all over again with an FHA mortgage. Now, it is unlikely you will be able to take cash out when you refi, unless you bought at a great discount or did enough renovations to improve the value; however, if you have other units that are covering your mortgage and then some, you should have no issue saving up the 3.5% again.

    The market is also softening a good deal, so focus on trying to get the max 6% seller concessions vs the lowest possible purchase price to minimize your cash out of pocket and set yourself up better for the next purchase.

  • Member since 2022 · 3 posts · 3 votes
    3y

    Thank you @Heath Thomas Jr for the insight! I greatly appreciate it! 

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y

    House hacking with FHA is a low barrier to entry and needs relatively low capital. BRRRR requires a large up front capital investment. So I would say it depends on the amount of available capital you have.

  • Julio GonzalezPro Member
    Specialist · West Palm Beach, FL · Member since 2008 · 4k+ posts · 1k+ votes
    3y

    You found the right place for information, Marshall! This community has a lot to offer! 

    Welcome aboard and best of luck investing!

  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    3y

    Welcome to BP Marshall!

  • Real Estate Agent · Hagerstown, MD · Member since 2019 · 160 posts · 121 votes
    3y

    Hey Marshall, I am currently househacking in Hagerstown and we absolutely love it, so you're making the right choice! As far as getting the next deal, there are a couple of ways you can get creative and it really depends on your life situation. Example: we too used an FHA, but my lender told me since we recently had a baby, this counts as a new life event and puts us in a position where we can refinance into conventional, and use FHA AGAIN to buy another house hack (which is exactly what we're doing). You could also search for a second property that is technically single family but operates as a multi family (house with an ADU), this way you put less money as a down payment.

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