Why Homesteading Is The Perfect Way To Finance A Minneapolis Duplex

For the record, I’m not a mortgage broker, tax advisor, or friend of anyone on the Federal Reserve board. However, I do know that one of the greatest methods of building long-term wealth in real estate is by “house hacking”.

While most cite the advantage of this approach is the reduction in the owner occupants own housing expenses, the bigger advantage of doing this are the lending advantages.

Owner occupants of small multi-family properties like duplexes, triplexes and fourplexes can purchase these properties with lower down payments and a lower interest rate than an investor can. Most mortgages requires borrowers to use the property as for a pre-determined length of time; usually somewhere more than 12 months.

At that time, the borrower can purchase another property using a different financing method. For example, they may purchase the first duplex with a 5% down first time buyer mortgage. They may purchase and live in the second using FHA financing. A year or more after that, they may choose to purchase another using a 15% down payment available only to owner occupants.

If the owner vacates the premises after having lived there the requisite amount of time, he or she is not required to refinance the original mortgage.

However, it is likely they would have to change their property tax classification with the county they live in from homestead to non-homestead. County taxation has nothing whatsoever to do with the mortgage.

Again, I don’t know anything about the situation with the Federal Reserve. But if you want to house hack, it’s a pretty good way to build long-term wealth.

Call me if you’re ready to get started.