Hey @Mark Alston , the financing part of house hacking is the most important... if you don't get it right you can paint yourself in a corner and it will take a long time to scale. And it sounds like you're talking about the conventional home possible loan, correct? That was the loan product my wife and I used to purchase our duplex... and we had a strategy very similar to yours.
As you probably know, for the most part, you can only have one FHA mortgage in your name at one time. There are exceptions that are few and far between (like if you were moved to another area by your work), but for the most part it's only possible to have one at a time. If two people are on the same FHA loan, then this counts as their one FHA loan.
One strategy is to leapfrog who is on the loan/purchasing the property and on title (only having one person, not both, on the mortgage and title of a single property). How this would work is one person would buy the first property with their FHA loan, and then when you're ready to purchase the second property, the other person could purchase it with their FHA loan. Yes, this does present the challenge of both individuals needing to be able to qualify for a loan on their own, but it's a great way to do it. Then, when it's time to purchase the third property, you could refi out of the first FHA loan (if you have enough equity), and then use your FHA loan again, or use a conventional loan product.
This strategy is not without its challenges. One person must be able to qualify for a loan on their own. It works well in Oregon because we’re a personal property, not community property, state. This means that when one of us goes to get an individual loan, the bank will not look at the other person's debts/liabilities.
My wife and I are leapfrogging but doing it slightly different than explained above. Our first purchase was a duplex and we used a 5 percent down conventional loan (again, only one person on the mortgage/title). The next property will be that same conventional product (if we still qualify for the home possible) purchased by the other, and then the following properties will be purchased with an FHA loan. Using the conventional product first does a couple of things for us:
- We won't have to refi out of the FHA loan to eliminate PMI
- Once we reach 20 percent equity PMI will go away
- We still have our FHA loans available to use
If you're single, or just don't have another person to leapfrog with, or one person alone doesn't qualify, you could purchase the first property with the 5 percent down "home possible" conventional loan, and then purchase the second property with your FHA loan. Game Planning for multiple house hacks can get a little tricky.
The best person to speak with would be a lender who is either an investor themselves and/or has worked with house hackers before. They're going to know all of the rules, gray areas, and will help you be able to game plan correctly.
BP is a great place to find lenders like this... or at least people who know lenders like this.
Best of luck and feel free to reach out with questions!
