Newbie Live-in Property Question

[Faisal Farnas]

BP Members,

I am in the process of closing on a property that will allow me to change my living situation and save a good chunk of money. I am looking for your opinions on the next step.

Some background information:

- Currently renting a 1/1 for $1300 (long story, don't ask lol)

- Purchasing a 3/1 with a detached 1/1 with conventional financing (4.3% rate at 5% down )

- Monthly Payment will be $1250. Tenant exists in detached 1/1 will be paying $550.

- PMI is around $70. Lender stipulates that I live in the place for 1 year minimum.

I plan to live in the 3/1 for a while, take care of any maintenance items and make some cosmetic updates, and eventually rent it out. Conservative projected rent for the 3/1 is $1150.

My question is what should be my next major step in the coming 1-2 years? Here are some scenarios that I can think of:

1) Use the extra money from the rent to get to 20% equity and eliminate PMI. But then what?

2) Don't make any extra mortgage payments, but save for a down payment on another property, then rent out the 3/1 and buy another property with owner occupied financing (after 1 year).

3) Focus on aggressively paying off the mortgage as quickly as possible by renting out the 3/1 and living in the 1/1. 

What do you guys think? Any other ideas?

For the record, I live by myself and have a great job, so I can afford to "house hack" and move around easily. I can also easily afford another 5% down payment on another property within a year.

Thanks,

FF