Buy a MFH now? Wait? Help!

[John Jamin]

Hi all,

I'm 33 years old (about to be 34) and I work as an Administrator in a school system making 125k a year. I just started and I have only been at this position for 3 months now. 

My situation is a big complicated. I have been living in my father's house in New Rochelle NY for most of my life. Now that I have this new job I work in Long Island which is an hour - 1.5 hours away. Because of the far commute I moved into my mother's home during the week because she lives only 30 minutes away from my job. I stay with her Monday-Friday.  Then, after I leave work on Friday, I head back to my dad's in Westchester. I stay there until Sunday afternoon, and then head back to my mom's. 

I have no children, but a steady girlfriend. I have about 30K saved up, and about 56K in my retirement fund. Ideally, I'd like to buy a Multi Family Home, live in on side, and rent out the other unit(s). Unfortunately, in this market, everything is going for over asking, and people are waving inspections as most of you probably know. I want to live independently and move out of both of my parents homes, however, I don't want to make a potential financial mistake. With closing costs and all other fee's, if I can't do an FHA it will be hard for me to afford a home in my area (in either Westchester or Long Island).

What would you do in my situation? My living conditions aren't horrible now, except my dad is a hoarder so his house is rather unpleasant. I'm also going back and forth between two places and putting a lot of miles on my car (and living in and out of a suit case). Plus, at my age, I am planning children, and regardless when I have them, it's time to move out. But, I don't want to move out with the expense of paying over asking for a home that might lose it's value.

Some options I thought of:

1) Keep sweating it out with where I am. Keep living between two homes. Save as much as possible, and wait for a better buying opportunity when I have more money and when perhaps the market isn't so crazy.

2) Buy a cheap(er) co-op or condo, live there, and after a bit rent it out or sell it to buy a MFH - but condo's here are pretty pricey as well.

3) Keep looking for a home despite the huge competition and crazy market.

What would you all do in my situation? Any advice would be truly appreciated.

Thank you in advance! 

 

[Rick Borgo]

Hi John, I agree with these guys, that if you find a MFH, you should house hack in an FHA loan. Live in one side, rent out the other. But I know these deals are very tough to find.

I am sure it must be straining to live out of a suitcase and at two different houses. If I were you, I would not rule out the idea of finding an inexpensive condo or townhome, say $300K (i know your area is expensive), put down 5% minimum for conventional loan ($15K). Budget in another $5K to $10K in closing costs. Live there with your girlfriend for a few years. Pay down loan and let home value continue to appreciate (like most expect it too). And then either sell, cash out refinance, or turn into an investment property when you need something bigger.

Just an idea to keep in mind if you don't find a MFH that fits the bill. Good luck! Keep us updated! And thanks for your work in the education system! Always under appreciated!