First Time Buyer Options - What Would You Do?!

[Bryan Robinson]

Hi All!

First off thank you in advance for all your help! BP has been a gold mine for me as a first time buyer to get on the path to wealth! I plan to begin my investing career next year and have several different options to choose from. I wish to hear your opinions on what you would do in my situation! 

Currently I have $21,000 in the bank for a down payment. I'm saving at $1,000 a month. I live in SoCal but want to move to Bend/Redmond Oregon to be near family in the next year. I want to buy a duplex for $225,000 in Redmond either as a investment or a live-in house hack. I also have the option to put money into a 6-plex here in Costa Mesa with a few partners. What should I do!!! In my view I have three options:

1. Invest in the 6-plex for about $25k and get a ~2.5% equity position. Then save for a 3.5% down FHA loan in Redmond, rent the other side and refi after a year into a conventional loan.

2. Don't invest in the 6-plex, save for conventional 20% down and save on PMI for the Redmond duplex.

3. Don't invest in the 6-plex, go FHA for the duplex then refi to buy another duplex in 1-2 years in Redmond.

I've spoken to local lenders who can do a 4.5% interest rate at 20% down, but with closing costs it's close to $60k! FHA is more expensive monthly with PMI, but I can get in for only 3.5% down with the eventuality of a refi to conventional a year later. Basically with FHA I would barely break even on my first year with negative cashflow given refi costs. If you were me given this situation what would you do? Am I overlooking something here? Is there an option I'm not researching? Thank you so much for your input, I really appreciate everything BP has done for me.

Bryan