All Forum Posts by: Justin Lichtle

Ok great! I knew that you generally want to refinance out of a FHA once you have enough equity to avoid MI, I just didn't know if any of the details in this theoretical situation would change what was allowed. Thanks for your quick reply!

I understand the DIY and 203k don't mix super well, so let's just say that I pay a contractor to do the work and the numbers stay the same.

I am in the process of looking for a MFH to buy and rent out with a small budget. I wouldn't mind doing a house hack, but my wife is a little more hesitant. Then today, I had an idea that I wanted feedback on. I would buy a house that needs some TLC with a 203k streamline at 3.5% down. Then I would pay a GC to do minor renovations. The repairs would be done within the 6 months allowed. And when done, the house would be worth more so I would refinance into a conventional loan with the equity gained from the remodal. 

At purchase-

• Loan Amount: $130,275 ($100,000 + $35000 with 3.5% down)
• House Value: $100,000

After reno and 6 payments-

• Loan Amount: $126,621
• House Value: $163,000
• LTV: 77%

Questions for you-

1. After the reno, with a LTV of less than 78%, could you refinance into a conventional?
2. Would refinancing mean you wouldn't have to live in the property like with a FHA?
3. Is this feasible?
4. Is this legal?

@Justin Fraser Maybe I should have made the title more clear. We definitely would not be comfortable sharing space with tenants. I intended my question to be house-hacking a duplex with a commute vs a live in flip or BRRRR closer to work.

I recently read Set for Life and am trying to use real estate to provide a passive income stream. I just graduated college in May and my wife and I live in an apartment within half a mile of both of our jobs. It seems like the best way to get into real estate might be a house-hacked duplex. But there are no duplexes near the area where I work (think classic suburbia). Habitable duplexes in safe neighborhoods will run about $200k and will be about 12 miles from our jobs. This would require us to drive to work, 25 minutes each way, but we could carpool. The other option would be to buy an older home within a mile of work for about $150k and try to sell it for a profit or rent it out after a year. We don't have a ton of savings and will probably need to use an FHA loan for the smaller down payment. I don't want to work a 9-5 for my whole life and am willing to make some sacrifices in the short term to reach our long term goal of financial freedom. Any advice would be appreciated.