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Frugality House Hacking

The House Hunt Begins + Checking My Privilege

Let me start this post off by saying — I wasn’t expecting any help from my family when I started saving for a down payment.

When I talked to my mom and dad on the phone (separately, as they’re divorced) about my wild rental real estate dreams, they’d say, “Wow, that sounds like a great idea!” But that was that.

I’d tell them I wasn’t ready to buy anytime soon, but that I wanted to start saving now.

I’d worry to my mom about my plan to stop contributing to my Roth IRA for the next year while saving for a multifamily property. She murmured her worry but said, “Well, if it’s only temporarily…”

My Family Privilege

I’ve been blessed all my life to have a financially stable family. I’ve never wanted for anything. And they supported me financially through college so that I could graduate debt-free.

I wasn’t good with managing money in college, so I still got myself into a mess with credit cards while trying to live the carefree, fun life in college. I collected tons of late payment and overdraft fees along the way.

But since college I’d been trying to make my way in the world without turning to them for help.

I continued to make idiotic decisions with credit cards, repeatedly got myself into deeper debt buying crap I didn’t need, and make a ton of other dumb money mistakes.

But I figured my shit out eventually and have been on solid financial footing for the last 2.5 years. 🙌🏽

Mamá to the Rescue

When he heard about my plans to save for a property, my coworker was kind enough to refer me to his realtor friend. I was kind of iffy about contacting him since we were at least a year away from being able to afford a down payment, but I figured it couldn’t hurt to take a meeting and ask some questions.

I told my mom I was thinking of giving him a call.

It must not have occurred to her that I was really serious about purchasing a rental property in the next few years, because she immediately said, “I had no idea you were thinking so soon! Well, I have a proposition for you…”

And then came her offer to contribute money for the down payment. 😭

I couldn’t even believe it — I was so blown away and immensely grateful for my mom’s generosity and support. Gracias, mamá. 💕

The Current Numbers

My mom said that she would most likely be able to contribute 25k toward a down payment. (Holy shit.)

Assuming I get pre-approved for a $325,000 home — which is what my realtor estimated — that would cover the 3.5% down payment (for an FHA loan) and closing costs.

$11,375 (down payment) + $9750 (closing costs of 3% purchase price) = $21,125

I’m not going to stop saving though. Since January, I’m at a little over $4,000 saved out of my own pocket. That’s 83% of my goal to reach $5000 by June!

Screenshot of YNAB savings goal showing $4163 saved of my goal to reach $5000 by June.

I’m just going to keep on going, since I’d rather have too much saved than not enough. Especially considering there are going to be other costs involved — inspections, possible repairs and renovations, vacancies, etc.

Plus, the more money that can stay in my mom’s pocket, the better. 💰👩🏽

Next Steps

I spent a whopping 3-4 hours yesterday filling out mortgage applications. It was brutal.

Never have I had greater regret about having 4 separate accounts at different banks and credit unions. Having to upload 2 months of statements for each account, and then having to enter separate savings and checking account balances for each institution — TIMES 3 APPLICATIONS.

I was a Grumpy McGrumperson. I straight up removed one lender from my list too, because I was over it and their application interface sucked. 🙅‍♀️

That was yesterday, so I expect I’ll receive the results sometime this week. I still have some documents to upload that I need to track down. (Crossing my fingers that I saved my W2’s from way back in 2018.)

For now I’m just bookmarking houses and twiddling my thumbs.