Investing in my own personal home. What would you do?

Question

For the past couple of weeks I have been browsing this site and I decided I want to pursue REI.  My first decision I need to make is that I need to buy a home for my wife and I.  We would like to find a house to settle into and start a family soon; hopefully by the end of the year.

I thought about house hacking but my wife doesn't want to start a family in a duplex/triplex.  We have 2 options that we are deciding on.  Wife wants a new house that's about 2300 per month PITI however the initial cost is down-payment only.  Closing costs and all appliances and shades are already in the house. I would live here for 10+ years.

I am leaning towards buying a cheaper and smaller house though, that'll cost me about 1700 per month in PITI.  It  requires a bit more money up front however I'd save more in the long-run due to the lower payment.   It is small but tolerable for 5-8 years with a young family.

Thoughts?   What route would you take?  I want to make sure I set myself up good so I can start REI.

Justin Fox · Answer

Since you can't do the wise thing and go straight into MF, you're best best is to get the lowest PITI possible that she'll tolerate.  So you can have extra $$ to save up for other properties down the road.

I would try to get her to settle for an okay, small 3/2 in an area that rents well and then upgrade down the road and rent it.  House hack in a way that will satisfy her.

William E. · Answer

take this with a grain of salt, since i wasn't married at the time and this was a few years ago.

but i bought an old (1940's) two story building that was a house converted to an office and marketed as an office. i purchased it from an out of state owner, negotiated it way down (90k) via relater, then converted it into basically a duplex.  I lived upstairs, and rented the downstairs.

i recently sold it for $250k (I should have kept it for a rental) in order to pay a down payment on the house i have now with my wife and kids.

'partners' make you do silly things when they don't completely understand the financial benefits.

with all that said, you can find a decent deal, sometimes you just need to get creative with it.

thoughts?

B

Nikolas Ferreira · Answer

yeah well you know the saying happy wife happy life lol....

and thats good safe travels !

Kevin Nguyen · Answer

@Nikolas Ferreira

Funny how much influence our wives have on our decisions.  Gotta keep her happy if she takes care of the kids.

Well good thing I didn't buy a house because my company asked me to travel out of state for awhile. Phew.

Justin Fox · Answer

In my opinion, yes MF is a better route if you're purchasing for investment purposes, specifically housing hacking in the beginning.  You have multiple units under the same roof that rent for comparable or possibly better rent per sqft.  So you have multiple units paying the same taxes and dwelling policy.  Also, one major CapEx is supported by multiple units (roof).

I'm not saying take my word without doing your research and take the plunge, but if you can find a good MF house-hacking deal and nag her into living in a 2/1 MF unit until you actually outgrow it,  that's what I wish I would have done.  We didn't even move out of our 1400 sqft 3/2 until kid #3.  The idea of the giant American Dream is great, until it becomes a reality and you have to clean and maintain it.

Nikolas Ferreira · Answer

what Justin said is very true, point out to her that the bigger the house the more it costs to run it day to day and also to maintain it and the more time it takes to clean it lol my wife wishes she would have listened to me on that one (we own a 3-2 2400sqft now) i wanted a 3 unit MF that was 1300sqft each she said it was too small now she gets mad when she spends all afternoon cleaning the house.

Shawn Ackerman · Answer

@Kevin Nguyen I think that is a great idea.  Take your time and make sure all the pieces to the puzzle fit.  Also you can look for SFR's that have an accessory apartment.  That's another option that will give you a SFR feel and the ability to generate some  income.  Good Luck

Kevin Nguyen · Answer

@Shawn Ackerman and @Justin Fox

MF is really the ideal way to go huh? Most of the MF properties in the desirable areas of Houston are pre-1950s and 500k plus.   I think I'll take a step back and rent for awhile longer so I can study and analyze the MF properties (SFR too) further before I take the plunge on a house.

Michael Le · Answer

I agree with @Justin Fox. Since she won't agree on the multifamily then at least go for a bread and butter property that is easy for you to rent out later. Remind her that this is a start property and not her dream home. If you move in 6 years you will be out of this home before kids are even starting school. If you buy too nice a home, though it will potentially appreciate, it will be harder to cash flow.

Jeff Wallace · Answer

Here are my two cents -  first of all, the absolute easiest way to get started investing in rental property is by living in your first rental property and buying it as an owner occupant...  and if you have multi family options, that will supercharge your progress -  and your success - Buy your first property live in it for a year or slightly more and move to the next ...  all of that is common sense and easy to figure out… My bigger concern is some of the language you use regarding your wife -  she absolutely needs to be on board with real estate investing or it will be a problem that creates hurdles for your entire life -  starting a family doesn't require much space… Once the family starts growing - that is when you need to move into your long-term property.  By then, 10 years down the road, you could have a pile of rental properties all purchased with low down payment and low interest-rates

Investing in my own personal home. What would you do?

Most Popular Reply