House Hacking Realtor

[Jason Chopin]

Hello, I'm currently looking to purchase and live in a multifamily property in Raleigh and I'm looking for a Realtor with house hacking/investment property experience. I've also received the following from my loan officer and would prefer someone with experience with conforming loans vs FHA.

You can put as little as 3% down with a conforming loan (a loan backed by Fannie Mae or Freddie Mac). The reason I recommend this for you is:

1.With an FHA loan, you not only have monthly mortgage insurance, but you have an upfront mortgage insurance premium which is rolled into your loan amount which is 1.75% of the loan amount

2.With an FHA loan, your monthly mortgage insurance is the same whether your credit score is 620 or if it's 850. This is good if you have a lower credit score, bad if you have a high credit score as you're subsidizing the lower credit scores monthly mortgage insurance.

3.With a conforming loan, you do NOT have an upfront mortgage insurance premium.

4.With a conforming loan, the mortgage insurance is risk based, meaning the mortgage insurance companies price the mortgage insurance based on your credit score and down payment %. With your mid credit score, I would strongly recommend a conforming loan.

Please send me a direct message if interested! 

Thank you!

Jason Chopin 

[Hannah Smith]

I would not recommend this strategy in the Triangle. This was my original thought but due to the inflated prices of MF inventory the core financials do not make sense (at least for my strategy...your personal preference my vary). 

Even if you circumvent the capital requirement and put less than 20% down on the property when you exit the investment the property should meet the 1% rule, you shouldn't overpay, etc. etc. 

If you buy a property with a smaller profit margin because you want to house hack in the Triangle and deviate from investment rules of thumb you may run into trouble.

Ex: if you have a vacancy, you have less cash-flow with which to survive on or if the market tanks and you'd like to lower rents to attract tenants, what happens if you're only cash-flowing $100, $200 after expenses? 

This is just my 2 cents from 2 years of watching MF inventory in the Triangle before moving onto other markets. 

I do plan on puchasing a SFH in Raleigh to live in but I'm painfully aware that it will likely be a lifestyle choice, not an investment.

cc: @Caleb Heimsoth