Quote Kai@Kai Soremekun:
Thanks so much for the replies.
Just to clarify. I applied for a conventional loan and got pre-approved for 1m using most of my money as downpayment.
Interests rates kept changing as the Fed raised them currently the pre-approval rate is around 8% which everyone has told me seems high.
My income was really low this year which means I'm relying on rents to cover the mortgage.
This was to buy a duplex or triplex.
I've been looking for a few months and even with a lower interest rate, say 5%, it's hard to find a property where the price of the property and the current rents of tenants work to cover a mortgage. The pre-approval will only consider 75% of the rental income. It really got me down which is why I started looking at the SB1079 law to see if I could find my first property that way.
Hi @Kai Soremekun, you already have a lot of good feedback here, but if I can add anything as a local agent, I'd say it's important to know your goals. If you want to buy a multi-family here in SoCal, cash flow won't come in the first years of ownership in most cases. Given your low rent situation, it's a tough decision to move out and house hack.
Would your landlord let you sublet your apartment?
Your out of pocket on the house hack will definitely be higher monthly, but you'll be paying down the mortgage, and earning equity at the same time.
If you put a large down payment, the cash flow looks better, but in your situation a $1M property should only tie up about half of your capital with 25% down. You can use the extra capital for other investments as well.
Again, lots of directions to go in, but hope this helps in some fashion.
