looking to buy a single family home now!!

Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes

2y

@Marquise Bailey-Dillard save for a downpayment and talk to some lenders about how you would qualify you for owner occupant loan. You may find you need to go conventional with a larger downpayment. You could get a HELCO before you start looking to help with the downpayment providing you have alot of appreciation in your current home.

Don't worry about the PMI, your interest rate and low down payment make up for it and depending on what happens in the future you could refinance to pull out equity.

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Cara HobbsBusiness Member

Real Estate Broker · MN · Member since 2023 · 17 posts · 6 votes

2y

Huge congrats on making strides with those student loans and navigating the 2-family house scene in Massachusetts!

It makes strategic sense to continue renting out the second unit while focusing on eliminating the remaining $17,000 in student loans. With such a favorable interest rate, holding onto your property is a wise decision.

As you work on getting rid of those debts, consider putting some of the extra cash into an emergency fund. It's not just for peace of mind but also to handle any unexpected home repairs or turnovers. At the same time, think about saving up for your next investment property. By managing your money wisely and investing in your property, you're on the way to building a strong real estate portfolio. Congrats on your achievements so far!

As you work on getting rid of those debts, consider putting some of the extra cash into an emergency fund. It's not just for peace of mind but also to handle any unexpected home repairs or turnovers. At the same time, think about saving up for your next investment property. The current market conditions make it a good time to explore more real estate opportunities. By managing your money wisely and investing in your property, you're on the way to building a strong real estate portfolio. Congrats on your achievements so far!

Don't forget, mortgage debt can be considered good debt. Think about grabbing another owner-occupied property so you can snag something with minimal down payment and keep up the house hacking game. It's a smart move to keep the real estate momentum going!

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Benjamin AakerPro Member

Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes

2y

Start talking to bankers about getting the next FHA loan. You should be able to find a duplex or triplex that gives you the space you need. Save up for the down payment once the student loans are paid.

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Rick Albert

Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes

2y

Are you open to buying another MFU? It isn't a buy idea so that you continue to build your wealth while your family grows. You are not likely going to refinance with that low of rate so look into the 5% down for MFU if it makes sense.

I would also look at what your payments are with the $17K. Keep in mind as far as qualifying is concerned, lenders look at your monthly payments, not total amount. It may not make much of a difference between buying now versus the spring.

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Marquise Bailey-Dillard

OP

Member since 2023 · 9 posts · 4 votes

2y

Quote from @Rick Albert:

Are you open to buying another MFU? It isn't a buy idea so that you continue to build your wealth while your family grows. You are not likely going to refinance with that low of rate so look into the 5% down for MFU if it makes sense.

I would also look at what your payments are with the $17K. Keep in mind as far as qualifying is concerned, lenders look at your monthly payments, not total amount. It may not make much of a difference between buying now versus the spring.

Thank you @Rick Albert for your response honestly it has been a goal of mind to pay off my student loans. I’ll be approaching my 30s this upcoming year and I told myself I’m going to be debt free and have student loans behind me.

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Marquise Bailey-Dillard

OP

Member since 2023 · 9 posts · 4 votes

2y

Quote from @Cara Hobbs:

Huge congrats on making strides with those student loans and navigating the 2-family house scene in Massachusetts!

It makes strategic sense to continue renting out the second unit while focusing on eliminating the remaining $17,000 in student loans. With such a favorable interest rate, holding onto your property is a wise decision.

As you work on getting rid of those debts, consider putting some of the extra cash into an emergency fund. It's not just for peace of mind but also to handle any unexpected home repairs or turnovers. At the same time, think about saving up for your next investment property. By managing your money wisely and investing in your property, you're on the way to building a strong real estate portfolio. Congrats on your achievements so far!

As you work on getting rid of those debts, consider putting some of the extra cash into an emergency fund. It's not just for peace of mind but also to handle any unexpected home repairs or turnovers. At the same time, think about saving up for your next investment property. The current market conditions make it a good time to explore more real estate opportunities. By managing your money wisely and investing in your property, you're on the way to building a strong real estate portfolio. Congrats on your achievements so far!

Don't forget, mortgage debt can be considered good debt. Think about grabbing another owner-occupied property so you can snag something with minimal down payment and keep up the house hacking game. It's a smart move to keep the real estate momentum going!

Thank you for your response!

I do have a little nest egg (3 months of mortgage). I honestly don’t want another owner-occupied home. I have asked my wife to sacrifice for the past few years, that she deserves a single family home and my children do as well!

Massachusetts is extremely hard to be an investor due to the high prices of homes, especially in the south shore Boston area.

I work for the state so in about 23 years (yes I’m counting) I’m hoping to be able to retire and use my pension and money I’m making off the multi-family to be able to live off comfortably.

Also other investment in the future I’ll dive into but I can’t ask my wife to sacrifice again lol

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Cara HobbsBusiness Member

Real Estate Broker · MN · Member since 2023 · 17 posts · 6 votes

2y

You seem to know where your values lie! Kuddos to you and happy house hunting!

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Devin PetersonBusiness Member

Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 665 votes

2y

Quote from @Marquise Bailey-Dillard:

Good Morning Everyone!

In 2020 my wife and I Purchased a 2 family house in Massachusetts for 380k and the interest rate is 2.75%(FHA Loan). If I knew what I knew now i would've not went with FHA due to always having PMI. We Currently live in one of our units and rent out the other. The goal was to live here until we pay off student loans and buy our single family. Well Things dont always go as planned. We now have a beautiful 2 year daughter and a full grown dog that needs more space lol. we currently have around 17K left in student loans and we started with around 80k combined!

I'm working my butt off to pay off the remaining student loans and hoping by spring time ill have them all paid off. my question to you is what should my next step be when I pay off my student loans? the only debt ill have is my mortgage

I do not want to sell the 2 family. I would like to hold on to it and self manage (small time landlord). both units will pay the Mortgage and some once its completely rented out.

Thank you in advance!

Hey Marquise! Local Peabody lender/broker and investor here...

I don't think selling wold be a great idea. Especially in a market like Boston where rents are at the nations highest rental rates. Kudos to you for paying off all that debt, very very tough and admirable to stay committed to such a daunting number

If you were to rent out the other unit you currently live in, my guess is that you could get more that what the other unit is renting for if you are occupying the nicer/bigger unit. Usually, that's the case. In any event, How much equity have you gained since 2020? Boston market has gone up aggressively over the years.

Can you possibly save up for a SFH (3% conventional) for new primary? Youll want to avoid assuming more debt before getting approved for a new purchase but if you need to and you qualify for it, consider a HELOC and worst case scenario a cash out refi to pay off debt and access funds for your next purchase.

Happy to connect to talk more options!

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Lien VuongBusiness Member

Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes

2y

Congrats on the debt paydown, I know that is not easy, especially with a growing family. Rates are going to better this year and as your financial situation strengthens I think you'll find that its an opportune time to get back into the market. Wishing you luck in 2024!

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Tre DeBragaPro Member

Real Estate Agent · Worcester, MA · Member since 2022 · 107 posts · 48 votes

2y

whats up marquiese! you might not even know what house hacking is but what you are doing is called house hacking and it is a great way to build wealth in real estate! I would definitely hold onto the 2 family and let the rent cover your mortgage as you build equity in the property while the property appreciates overtime. once you have 20% equity in the property you will no longer need PMI. Maybe by the time your daughter is ready for college that 2 family can pay for her schooling + more.

regarding next steps in buying your next house for you and your family. I would definitely start talking to lenders and a realtor ( me ) about lending programs and what you can afford. I assume you have great credit due to you paying off your debt so quick. The debt from the 2 family shouldnt hold you back if you can show it is being rented. theres so many different routes you can go like the traditional route or take advantage of some MA home buying programs. we would need to talk further to see what fits you best. any questions feel free to reach out. Good luck!

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Daniel McDonald

Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes

2y

Ya man, I'd never let that baby go! The PMI is worth it if it's cashing flowing and the rates that low. Have you looked into doing a refi? With rates where they're at it probably would even out to about the same so not sure if it's worth it but if the PMI is that much of a concern to you could be worth it!

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James Likis

Investor · Boston, MA · Member since 2019 · 47 posts · 22 votes

2y

FHA PMI sucks so bad. As rates do come down some, this property continues to be your primary residence, and you have more and more equity (and therefore a lower LTV) you could hit a point where the refinance won't add too much to the monthly expenses when you account for PMI being gone. As your equity builds and rents increase, a cash out refinance to fund your new down payment could also be an option.

My wife and I were fortunate to be able to keep our condo in Jamaica Plain when we did a cash out refinance to fund our two family househack in Dorchester. We also used some of that cash out money to payoff student loans.

As time passes, you should have more and more options. Good luck!

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Karen Chow

West Linn, OR · Member since 2023 · 35 posts · 23 votes

2y

If your daughter is 2, one thing to think about now is school districts. You should think about where you want to be for your daughter's whole schooling. For us, we moved 10 min away into a better school district (with double the cost per square ft). So you could consider waiting another year, paying off the debt, saving up more for a downpayment, and then buying the house you'll be in for your daughter's whole schooling.

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looking to buy a single family home now!!

looking to buy a single family home now!!

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