When I say renting, I live with my partner and pay them a certain amount a month to help cover bills. Very long term relationship, we’re DINKWADS, no kids or plans to have them, no plans to get married. They own the home, and it’s 100% in their name. They can easily afford it on their own. My monthly expenses are a very small percentage of of my income, <10%. I can comfortably afford a $500k home on my own at current rates and my DTI would still be WAY below 50%, prob closer to 25% all in.
My plan is to basically make my home a man cave and potentially have colleagues stay there in the summer (I work in fire so summers are busy). They’d pay me per night, probably through Venmo. It would be cheaper than any hotel in town for sure. We’re considering doing an addition to my partners home, but it would be a lot of money short term – probably around 200k, versus getting into a ~500k and associated closing costs – not to mention the equity/investment opportunity and tax advantages of owning a home. I’m looking at smaller places <1500sqft to keep utility bills down. Smaller the better, assuming there is a space large enough for a golf simulator…
Legally, can I buy this home and make it my primary residence? I’m away from home about 150 nights a year with my job as it is, so I have an excuse for not being there all the time. Realistically, I probably won’t sleep there most nights when I am home. The biggest reason I want to make this my primary residence is so I can put a smaller percentage down, instead of the 15% min for an investment property. I have money invested I could pull out for 15 or 20% down I really don’t want to touch, but I’ve have liquid for 5-10% down in the relative short term. Our market is HCOL but it’s softening and I’m seeing some opportunities pop up that are intriguing in the 400k range.
Big ticket question, would it be considered mortgage fraud to use this house, as I’ve explained, and call it my primary? I feel like if I have to ask, it is. Biggest concern would be a nosey neighbor raising questions since I won’t be around a lot.
Down the road, I could see us doing the addition at my partners house and making this home a full time rental – but that would be 3-5 years after purchase.
Currently “renting”, can I buy a home and make it my primary while still “renting”?
byu/quackquack54321 inrealestateinvesting
Posted by quackquack54321
4 Comments
Probably considered mortgage fraud, but so long as you are current on the loan no one will know or care. Primary residency requirement is usually only 12 or 6 months anyway.
sounds like youre walking a pretty thin line here man. if youre not actually gonna be sleeping there most nights when youre home then yeah thats probably gonna be an issue with the primary residence thing
the lender is gonna want to see that you actually intend to live there as your main home not just use it as a crash pad or rental income generator. having colleagues pay you to stay there even occasionally is gonna make this look more like an investment property setup
honestly if your expenses are that low and you can afford the 15-20% down without touching invested money maybe just go that route. mortgage fraud isnt worth the risk especially when it sounds like you can swing the investment property requirements anyway. plus if neighbors start asking questions or the lender does any follow up youre kinda screwed
When you buy a primary there will be a section you sign stating you’ll occupy the house within 60 (normally) days of closing.
You can legally buy it as a second home or investment property with your intended use.
Does your partner own their home free and clear? If not, and if it were me, I would want to help pay off my partner’s home first. And not spend money on a “man cave” that is going to sit empty most of the time, plus run the risk of neighbors reporting your illegal BnB.