Originally posted by @A.S. Minor:
I am on the path to purchasing my first home. Ultimately, I plan on "house jumping," for lack of a better term. I would like to buy my first home, and after a few years of living there, buy my second home, move into that one, and rent out the first. Then we rinse and repeat. I was looking for advice on whether this plan is advantageous in the long-term, or whether I should adjust it based on the factors below. The adjustment that I am considering is whether I should try for a duplex/triplex for the first home. This was my initial thought process, but (A) I was having difficulty finding them for sale in my area (Volusia County, Florida), and (B) the below information:
My girlfriend is a dog trainer, and her business goals involve board-and-trains, meaning we'd need enough space to house at least a few dogs for a few weeks. That's not the focal point of my investment, but it is a factor that must be taken into consideration. So we have to consider space, of course, as well as any zoning restrictions (she's been focusing on that aspect). But if we were to get a duplex, we would also have to factor in information regarding tenants (allergies, small children, etc). Now, when I do begin this journey, I've kept in mind that this first property is not our long-term home. Our second property is likely to be longer term. Ideally, I would like to continue this jumping until we've accumulated enough properties to pay for our final home, but depending on the circumstances I'm flexible when it comes to which one will actually be the one.
Obviously there are more factors to consider when combining the idea of a multi family unit with this business plan that she has. So that's my ultimate question: Whether this plan seems feasible with a duplex/triplex, or whether I should just stick to single family homes. We're not looking to have an entire complex of dogs in this first property, but at least 3 or 4 for a few weeks at a time. What are your thoughts on being able to combine her goals with my own?
Hi A.S. Minor,
I think house-hacking is the way to go. If you buy a single-family, the house isn't an asset, it's a liability (that's Rich Dad, Poor Dad 101). However, if you plan on buying a single-family and running a dog training facility out of it, then if that business eventually covers the mortgage and you can cash flow from it, you've effectively changed the single-family into an asset. You would just be replacing tenants with dogs, which would be much more easier to deal with.
With that said, your girlfriend's startup business might fail to generate the business you anticipate. It seems hard to quantify how much money she could generate (most startups don't do well) whereas if you rent to tenants, your cash flow is easier to calculate. I recommend you analyze these points before deciding which house to choose.
House-hacking is a widely adopted strategy for reaching financial freedom very quickly. Virtually all investors started out with a FHA or VA multi-family house-hack. I recommend you listen to the Biggerpocket's podcasts, read up on house-hacking, and read Brendon Turner's books (all of them). Then you'll realize the power of house-hacking through a multi-family.
Either way, you should act on your ambitions.
Cheers.
