All Forum Posts by: Lisa Irimata

@Doug Phillips I recently found out about single payment mortgage insurance where you pay the PMI upfront rather than month to month. You'll have to work with your lender to see if you qualify but thought I'd just throw this out there since I didn't know when I applied for my first mortgage! From what I understand this only applies for conventional loans (not sure if you are only considering FHA or not) and typically you'll pay less with the upfront payment as long as you live in the property for about 3 years but you'll have to calculate your own break even point for your specific loan. After my lender mentioned this to me this was the article that I read to understand more:

https://www.bankrate.com/finance/mortgages/single-payment-mortgage-insurance.aspx

@Aaron Zimmerman Hope everything works out for you! Though if you're already thinking about REI and FI I'm sure everything will. I've never had an issue with my SO not being on board but I know that's a common talking point within the FI community. If you haven't already you should check out some of the podcasts on BP because I know I've heard a few of the interviewees talk about working with their spouse/SO to get on the same page.

Also if you’re interested in maximizing tax savings/index fund investing I’d highly recommend The Mad Fientist!

@Aaron Zimmerman funny enough I didn’t know anything about house hacking or BP when I bought my first property. I ended up buying my townhouse because I needed a place to live and my previous arrangement fell through, ended up working out though so here are the details.

I knew that I didn't want to be house poor so I was strictly looking at properties that were ~75% of the total loan I qualified for. I had one roommate lined up so I knew I wanted a minimum of 2B2B but preferably 3B2B. I used a real estate agent and found my property on MLS where it had been sitting for over 2 months. Purchased at $190k with 10% down, conventional financing. Took about 1 month to do some light rehab which I did myself (paint, new fixtures, repaint cabinets, etc). Haven't refinanced or anything yet but am planning on doing so after I move out and change out the flooring.

After 1 month had my first roommate move in. Within the next 6 months I got the den converted to a third bedroom and had a second roommate move in. With the second roommate my entire monthly mortgage/taxes/insurance/PMI is covered with a surplus of ~$100. I pay for all utilities/water/internet which is about $250 per month. So in total I'm only paying about $150 each month to live!

Reducing my living cost has definitely been the biggest contributing factor to a high savings rate. Are you currently house hacking or finding ways to reduce your cost of living? Excited for you to start your FI journey too!

@Lamar Jean I'm not sure of other options as I funded my first property with a conventional mortgage. Do you have a lender you could talk to about your options? I've heard that it's pretty difficult to get approved for multiple FHA loans. If I stumble across something I'll definitely be sure to let you know!

@Silas Rogers keep us updated on how it goes!

@Silas Rogers If you haven't already, I'd highly recommend reading the house hacking article on BP, that's what I referenced when I first learned about house hacking.

 https://www.biggerpockets.com/blog/2013/11/02/hack...

For my market I wasn't looking too hard for small multifamily because they are pretty scarce and are often in C/D class neighborhoods which I didn't want to live in. Honestly I did not buy my first house with the intent of house hacking, I mostly just really needed a place to live at the time. That being said I specifically looked for either houses/townhouses that were 3B2B or 2B2B (with the ability to easily add a 3rd bedroom on) and I wanted a max purchase price that was ~75% of the largest loan I actually qualified for. 

I found my current place on MLS through my realtor after touring a bunch of house and honestly I got really lucky. The numbers ended up working out great for me even though I hadn't specifically been using the 50% rule or anything. Looking back (and towards the future as I am analyzing my next deal specifically for a house hack) the biggest factors I'd consider are:

1. Average rent in the area you're looking to house hack in -- don't high ball or low ball what you'll actually be making on rent. A friend of mine high balled the amount she'd be getting per month and ended up getting rid of the rental property rather than having negative cash flow every month.

2. What amount of rehab you want to put into the property since you'll most likely be living there while you're upgrading. I went for light rehab because due to lack of funds I knew I'd be doing a lot of the rehab myself.

3. Max purchase price and if the property fits into the 50% rule when you have roommates. See the above article for details on the 50% rule.

4. What type of property makes sense in your area and what are you going to be happy with. As I mentioned before I didn't really consider small multifamily BUT I already have friends lined up to live with me so I wasn't concerned about sharing my actual house with a stranger, I don't think I'd be comfortable renting out a room to 2 random people.

@Bart H. Thanks for the detailed response, for the letter justification did you typically work with your lender/agent on that or did you personally submit a note when you were contacting lenders? Never thought of the situation where lenders would be suspicious about moving from a larger to smaller property but it makes sense. Overall sounds like the process isn't too difficult versus what I imagined. 

I'm currently in the process of finding (and hopefully purchasing) a new property after house hacking with my current residence for 1 year. I'm planning on converting my current residence to a full rental and then house hacking in my second property. Since I'm a young professional (no family, etc) I'm planning on house hacking a few more properties to build up my portfolio within the next few years. 

Has anyone else done this? What are obstacles did you observed will constantly changing your primary residence? Any advice on going forward with this path?

It should be possible to refinance but you would need to figure out specifics of if you have to hold the FHA loan for a certain length of time or not. Also note that refinancing later will result in more closing costs (I didn't know this originally so I thought I'd just throw that out there). To my knowledge the power of house hacking is that you can get duplex, triplexes, or quadplexes for significantly less money (i.e. putting down 3.5%) but I'd recommend reading the BRRRR article on here if you haven't yet. You may want to consider a BRRRR/house hack combo situation so that you can put little money in upfront but then end up with more equity after you rehab/refinance.

 I am exactly in this situation right now. I've been at my current residence for 1 year and am looking at moving to another house within the next few months. My understanding is that the biggest issue for getting approved for a loan (assuming you're not just paying all cash) is proving that you'll actually use the second property as your primary residence and that you can afford a second mortgage. I claimed my current house hack as rental income on my 2018 taxes and according to the lender I'm working with, this will make it easier to prove that my current residence will be transferred to a full rental.

Another few points of what I'm planning on doing in case you have any other questions (I'm sure this will change): I'm doing a direct mail campaign and am planning to finance with either conventional or FHA. I'm trying to do a light live in flip (cosmetic rehab) so I'm looking at 203K and other rehab-related loans.

Sorry I can't give more specific details but this is what I've learned so far, so hopefully it's helpful!