First time Investor needing help!

[Thomas Farley]

Hey Bigger pockets people! I am a first time investor and i'm trying to figure out what is the better investment for me. I'm currently looking at a multi family in my area of Connecticut I have an opportunity to utilize a FHA loan and only put down 5% which I currently have or do I continue to save another year or so for 20% down conventional loan? The numbers work on the property where I could house hack and live in one unit and rent out the other unit which would cover all monthly expenses including PMI, abling me to live for free. I'm curious to hear from your experience and knowledge and What you would do in my shoes. Thanks BP!

[Brenden Mitchum]

Hey @Thomas Farley, welcome to the BP community!

This one is a no-brainer for me. If you're living for free then really you are making a return of whatever rent you would be paying every month. That's likely somewhere from $600-2000. Plus, you're receiving that return with very little money down so your CoC is much higher than if you waited and purchased the same property with 20%.

House hacking is an incredibly powerful strategy for those who can do it and should absolutely be utilized if accessible. Even if you had the choice between house hacking and purchasing as a traditional investment, I'd still say house hack, as long as the number made sense. 

By the way, you can likely get in for less than 5%. Last time I checked FHA minimums were 3.5%. However, maybe this depends on the borrower. Still, definitely something to look into with your loan officer.

Hope this helps a bit! Please, feel free to reach out anytime if you have other questions or just want to chat!