All Forum Posts by: Ryan Palczynski

Hey everyone! I'd appreciate any thoughts you would be willing to share on my situation.

I am a recent college graduate (age 23) looking to get my foot in the door of real estate investing through house hacking. Here is my situation:

I have 20k in savings, mostly invested in mutual funds. I have 25k in student loans (much lower than they could have been, as I saved much by working as a Resident Assistant in campus dorms for the past two years, which means free room and board). In June I will be moving to the DC area on a 67k annual salary pre-tax. I am also engaged, planning to be married in May of 2024.

Given my phase in life (young and without kids) I like to think it is an ideal time to begin house hacking. I am pre-approved for an FHA mortgage of 300k, which (with a ~12k down payment) could get me into a 2-bedroom condo in the DC area, where I could live in one bedroom and rent out the other. This is a property that eventually (given 1-year occupancy obligation) my future wife will move into temporarily, until we find another property to house hack after the 1-year obligation. Because of this, I could only offer a 9-month lease to a roommate.

I think to delay purchasing a property would be a missed opportunity, especially because after I am married, a future house hack would need to be a duplex or multi-family (compromising for the comfort of having a separate unit), which in the DC area are much more expensive, and even with two incomes, we may not be able to get approved for a mortgage for that amount.

Should I make the leap and house hack, perhaps spreading myself too thin with little buffer, but securing a property that could later become a cash-flowing rental? Or is it preferable to spend the next year renting, paying off student loans and building savings to purchase a rarer and far more expensive multifamily property, and delaying my RE investing journey?

Thank you for your thoughts!

It's always smart to remind yourself not to overleverage other people's money - definitely have to be aware of the risk in the case that a housing crash occurs. 

If there's a positive side, a housing crash decreases homeownership, pushing people to turn to renting - increasing the supply of potential tenants. On that note, if you've paid off your mortgages and own your rental property, it isn't 100% bad. Just another way to look at it.

@Cortez Dameron Totally agree with @Ari Bachrach . If you're planning on starting with condos or smaller units, you're better off investing in places near universities or with a high demographic of young people. College students and recent graduates seem to be the only group looking to rent small condos or apartments, considering the cheaper cost of rent and the fact that they typically live alone, not having settled down or started a family.

@Brent Coombs That could be a good plan. My father is a 'Rich Dad, Poor Dad' guy, so I'm sure he'd be willing to jump on board as an active investor. I know of people who been non-occupant cosigners for an FHA loan, but I believe that impacts their debt-income ratio as if they were the property owners themselves (and their credit in the case of a late payment), which is what I was hoping to avoid. I'll do more research and let you know. Thank you!

@Curt Davis Thank you for the reply! I'll definitely look into those restrictions on FHA loans - don't want to get in trouble for not reading the fine print. That sounds like a good plan - have them co-sign now, and then I can refinance later.

@Jay Statzer  Thank you Jay! That would be awesome - I would love to discuss the ND market with you.

Thank you all for welcoming me to the BiggerPockets community. Certainly wish you all success in whatever your endeavors may be.

@Aaron Linden Dude, it's crazy - $16k/year is out of my price range! Unfortunately, they just changed campus policy too - now, undergraduate students are required to reside on campus for their first three years, leaving only seniors and graduate students as the market for tenants.

@Colin Conn  Thank you! Actually, I plan to do exactly that! House hacking would save a ton of money considering room and board at Notre Dame is nearly $16k per year, and could bring extra monthly income if the property is cashflow positive. 

Thank you for the advice!