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Frugality House Hacking

The House Hunt Begins + Checking My Privilege

Let me start this post off by saying β€”Β 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. πŸ™ŒπŸ½

MamΓ‘ 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 β€” I was so blown away and immensely grateful for my mom’s generosity and support. Gracias, mamΓ‘. πŸ’•

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 β€” which is what my realtor estimated β€” 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 β€”Β inspections, possible repairs and renovations, vacancies, etc.

Plus, the more money that can stay in my mom’s pocket, the better. πŸ’°πŸ‘©πŸ½

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 β€” 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. πŸ™…β€β™€οΈ

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.

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