First Time Househack in San Diego with $45K Cash - Possible?

[Emma C.]

Hello SD folks,

I'm about to move out of my rental ADU ($1.5K/month) in the next month or two, because the property I'm living at was recently sold to another owner. Looking at the rental market, the rent is outrageous. I can't really find anything decent for less than $1850... which makes me think about possibly look for a duplex or a single house with an ADU (or built one?), then househack live in one (ADU) rent another. I'm fully understand that will not generate positive cash flow but I rather pay to own something than paying hefty amount on rent.

My biggest issue is that I only have $45K in saving, would it be possible? Do you guys have any recommendation on good local real estate agents who specialize in "househacking" and can advise me on this? 

Thank you so much

[Jordan Graham]

Hi Emma,

I totally agree with this train of thought and think that it is always better to own vs rent, especially if you can get someone else to help pay your mortgage for you. Like mentioned earlier, you have a many options for low down payment such as 5% conventional and 3.5% FHA. I recommend always going for conventional if able because the PMI is drastically lower than FHA and you have to refinance an FHA into another loan in order to get rid of PMI at the 20% equity point (conventional PMI falls off automatically). Rates are so low currently that I think it is smarter to lock in a great rate now because who knows what they will be when it comes time to refi with FHA.

Another thing to consider is are you comfortable spending most or all of your savings on a purchase? You can expect to pay 5% down plus a minimum of 2% for closing costs. I have a great spreadsheet that shows what you can expect to pay out of pocket and future potential ROI if you would like me to send it to you.

Thanks

Jordan Graham, Whissel Realty (#1 Team in San Diego)