Has someone sold their primary home to buy a duplex? Any regrets?

[Mirbeni Gonzalez]

My only experience with real estate is purchasing my first home with FHA in 2020 with the amazing 2.25% and a lot of reading books and blogs to get an idea. My husband and I are self-employed, we provide executive transportation services in Miami. Decent income and good credit score, High DTI because business vehicles and no big savings (Working on that).

We want to grow our company; but we need to move to a better area in Miami and beat the traffic. We think this is our opportunity to start investing in REI and House Hacking a Duplex. My husband wants to sell the house to put the downpayment (less than 100k) if we qualify. I am not sure. I want the slow way and save money to buy the duplex, keep the primary as rental (will cashflow around $200/m) and do not lose the free money at 2,25% and future house appreciation. I know there is not enough information to make an informed decision, but I just want to read any similar experience here to overcome my analysis paralysis. I really appreciate it.

[Jason Wray]

Mirbeni,

Sounds like you are moving into a direction of growth which is great. Few things to help offer some insight or options. If you own your own business and you have a "Business Checking account" you need to start paying all of your vehicles and credit cards out of the business account if you are not doing it already. If you can show either 12 months cancelled checks or 12 months bank statements showing vehicle's or credit cards paid from the business account the bank "Omits" or removes the debts from your personal DTI.

Have you calculates what would be the maximum amount you could take out of your home either cash out refinance or line of credit to use as a down payment versus selling the home. If you can get out enough cash and still cash flow it might make sense to keep the home. One important tip is make sure you take out the cash or line of credit before you move out so you can get the primary home LTV and rate.

Once you move out its non-owner occupied and the rate is higher and LTV for max cash out goes from 80% to 75% LTV. Buying a 2-4 unit is just a smart move in general because it allows you to buy a future rental with less money down. It also decreases your overall payment on the mortgage since you have another unit(s) helping with the monthly PITI payment.

You can also take out a Heloc or Heloan that will keep that first rate of 2.25% in place. Mortgage rates have come down since December so it helps afford the new cash out payment.