I'm purchasing a 4-family apartment building using an FHA loan 3.5% down (living in one of the units for 1 year). I need to know whether it makes sense to aggressively pay down principal, or to save up that cash to buy another house next year. Here are the details.
Purchase price: $360k, 3.5% down
30 year fixed
Interest rate: 4.15%
Principal + interest: $1689/month
Combined rents from 3 other units: $3150/month
Essentially in this scenario there is a cashflow of $0, but I am also living-rent free. When I move out and the 4th apartment is rented, the cashflow becomes $1100/month. Should I aggressively pay down on principal right away in order to get 20% equity as fast as possible and refinance? I want to buy another single family or condo next year. Could it make sense to save up the extra cash towards another house next year (20% down, no PMI)?