Could use some House Hacking tips for a new real estate investor.

[Darius Wade]

I am currently in the process of acquiring my first buy and hold multifamily property. My cash on hand is not enough to pay the 20% down payment for a loan so I have opted to put 5% down with a conventional loan. I chose this financing strategy instead of an FHA because I do not want to have mortgage insurance for the life of the loan. This will of course be my primary residence because it is not qualified as an "investment" property yet. So, with only one tenant in place, I would still owe around $350 a month for the duplex. So, with that being said would it be smart to aggressively pay down the mortgage while house hacking? My rational for doing so is to build up to that 20% equity in the home so that when I move out and put a tenant in my unit my margins can be increased. This is because at 20% equity my mortgage insurance will roll off the loan lowering my monthly payment by about $150 a month increasing my cash flow but lowering my COC return because more money is being put into the deal. Is this an ok option to take or should I just continue to save in order to get into another deal?

[Jevon Shaw]

It depends on what you want real estate to do for you, and how quickly. Keep in mind, the only thing that allows anyone to leave their job is high enough cashflow, whether that be via rentals, flips, or whatever. If you'd like to eventually do this, the right answer may be to pay down the loan up to 20% equity.

For what it's worth, I was in a similar situation, and I chose to pay down the loan up to a certain point. I ended up living off of part cashflow from the house hack and part savings for about 6 months to learn to code full-time. Needless to say, this led to much more lucrative career opportunities. No regrets about it. Hope this helps!