u/ImIncognito12

I'm a first time home buyer and I'm under contract for a 1920's 1/1 duplex in a very popular, walkable neighborhood in my city where new SFH are selling for over $1M (SFH reno next to mine sold for about $800k). My plan is to house hack for at least two years before renting both sides out. This is an appreciation and a cash flow play. I've been looking for a duplex for almost 2 years and have been under contract twice before — both homes needed extensive work ($200k+) so I pulled out. I've been staying with a friend for $700 a month for a little over a year while I've been on the hunt. This set up works as we get along and I've been able to save a ton and invest the difference into a brokerage account, but I'm definitely ready to have my own space in a more desirable area.

The duplex was listed for a little under a month with a lot of views/saves but I believe I was the first offer they received and accepted. They are motivated to sell.

I toured the home knowing work was needed and planned on using the homestyle renovation loan with an architect that I've built rapport with. Unfortunately, a day before my initial DD period ended, my lender shared that they wouldn't qualify because the GC they work with is a 1099 employee and not a W2 (there's more to this but just providing basic context). This was a blow as I really trust and appreciate his team's vision. I know it's an investment property but I want it to feel like a home and match the aesthetic of the neighborhood it's in.

I ended up extending the DD period so I could try to find a licensed GC. The one I found does great work but the budget he delivered appears to be severely inflated based on the scope of work I provided and the first budget that was provided by the architect. I believe he's inflating because he's aware there's a time crunch and I have no one else to turn to. I'm also a woman.

My DD period has expired but I'm within the financing and appraisal contingency period. I'm considering switching to a traditional conventional loan and financing $80k ($50k savings + $30k personal loan) out of pocket. This would allow me to work with the architect and his team.

I'm re-reviewing my inspection reports and notes to make sure I'm not naively going into this and a few things stick out:

• PVC pipes are visible above ground but they ultimately connect to a cast iron pipe under ground/beneath the crawlspace
  • Somewhat related since cast iron pipes are often entry points — there are signs of rodent activity in the attic and crawlspace. It looks like there were signs of rodents inside the water heater closet which is inside the home. My plan would be to address this before reno begins.
  • I'm considering ordering a sewer line inspection.
• There are missing GCFI protectors which is not too concerning but I'm wondering if I should be concerned on whether the home is grounded? I know this can be difficult and expensive to deal with.

These items are not included in my current scope of work as they are not explicitly cited as issues.

Monthly Numbers:
Mortgage: $3,619 (includes PITI)
Personal Loan: $775
Total Debt Obligation: $4,394

Expected rent:
$1,950-$2,100 per unit

Take home pay is $5,372.7 after maxing out my 401(k), HSA and FSA accounts. I'll need to stop contributing to my 401(k) in about 3-4 months as I'll hit the max after a bonus hits in few months. I have no other debt. Remaining liquid savings would be about $18,000.

My goal would be to refinance within the year. I know it's a gamble...but I originally chose my current lender because they offer homestyle reno loans on MFH but their rates are higher for all of their loan products. My current rate is 6.875 with no points so I feel that this is plausible but also very aware of the current political and economic climate.

At any rate, I'm assuming forced appreciation so I'd also remove PMI. I plan to pay the personal loan off early as well — maybe in 2 years.

This has not been an enjoyable process and I'm exhausted. I want to make sure this isn't an emotional buy. I also don't want to walk away due to fear and my current financial comfortability.

I tried to keep this short but also starting to spiral...so if you made it this far and have some sound advice I am forever grateful.

I'm a first time home buyer and I'm under contract for a 1920's 1/1 duplex in a very popular, walkable neighborhood in my city where new SFH are selling for over $1M (SFH reno next to mine sold for about $800k). The purchase price is $425,000 and it needs about $80k worth of work.

My plan is to house hack for at least two years before renting both sides out. This is an appreciation and a cash flow play. I've been looking for a duplex for almost 2 years and have been under contract twice before — both homes needed extensive work ($200k+) so I pulled out. I've been staying with a friend for $700 a month for a little over a year while I've been on the hunt. This set up works as we get along and I've been able to save a ton and invest the difference into a brokerage account, but I'm definitely ready to have my own space in a more desirable area.

The duplex was listed for a little under a month with a lot of views/saves but I believe I was the first offer they received and accepted. They are motivated to sell.

I toured the home knowing work was needed and planned on using the homestyle renovation loan with an architect that I've built rapport with. Unfortunately, a day before my initial DD period ended, my lender shared that they wouldn't qualify because the GC they work with is a 1099 employee and not a W2 (there's more to this but just providing basic context). This was a blow as I really trust and appreciate his team's vision. I know it's an investment property but I want it to feel like a home and match the aesthetic of the neighborhood it's in.

I ended up extending the DD period so I could try to find a licensed GC. The one I found does great work but the budget he delivered appears to be severely inflated based on the scope of work I provided and the first budget that was provided by the architect. I believe he's inflating because he's aware there's a time crunch and I have no one else to turn to. I'm also a woman.

My DD period has expired but I'm within the financing and appraisal contingency period. I'm considering switching to a traditional conventional loan and financing $80k ($50k savings + $30k personal loan) out of pocket. This would allow me to work with the architect and his team.

I'm re-reviewing my inspection reports and notes to make sure I'm not naively going into this and a few things stick out:

• PVC pipes are visible above ground but they ultimately connect to a cast iron pipe under ground/beneath the crawlspace
  • Somewhat related since cast iron pipes are often entry points — there are signs of rodent activity in the attic and crawlspace. It looks like there were signs of rodents inside the water heater closet which is inside the home. My plan would be to address this before reno begins.
  • I'm considering ordering a sewer line inspection.
• There are missing GCFI protectors which is not too concerning but I'm wondering if I should be concerned on whether the home is grounded? I know this can be difficult and expensive to deal with.

These items are not included in my current scope of work as they are not explicitly cited as issues.

Monthly Numbers:
Mortgage: $3,619 (includes PITI)
Personal Loan: $775
Total Debt Obligation: $4,394

Expected rent:
$1,950-$2,100 per unit

Take home pay is $5,372.7 after maxing out my 401(k), HSA and FSA accounts. I'll need to stop contributing to my 401(k) in about 3-4 months as I'll hit the max after a bonus hits in few months. I have no other debt. Remaining liquid savings would be about $18,000.

My goal would be to refinance within the year. I know it's a gamble...but I originally chose my current lender because they offer homestyle reno loans on MFH but their rates are higher for all of their loan products. My current rate is 6.875 with no points so I feel that this is plausible but also very aware of the current political and economic climate.

At any rate, I'm assuming forced appreciation so I'd also remove PMI. I plan to pay the personal loan off early as well — maybe in 2 years.

This has not been an enjoyable process and I'm exhausted. I want to make sure this isn't an emotional buy. I also don't want to walk away due to fear and my current financial comfortability.

I tried to keep this short but also starting to spiral...so if you made it this far and have some sound advice I am forever grateful.