Starting in MFH?? Read this and Bring your Questions
Q: I like the concept of MFH investing, where should I start?
Short Response:
1. Eliminate your rent/mortgage payment
2. Bring all deals to the BP community (and be humble when doing so)
3. Stick to the returns you want
Long Response:
Learn everything you can about multi family investing. Every day you should answer a few questions and write down several new ones.
The general theory is that you need to drive costs out of your life and/or add new revenue. If you live with your parents, and they don't charge you rent, good. I'd then start forcing yourself to put $500-700 away each month as a "rental" payment towards some real estate.
If you pay rent of any kind, to your folks or to another landlord, find a way to eliminate it from your life. My suggestion is to find a 3 or 4 family property that you can purchase. FHA loans are a good way to go, but be wary of the additional percentage points you have to pay each month as PMI. Homepath loans are great as they have no PMI. VA loans are even better, but require you to have served in the US military.
Run every deal you find through the BP community. Some of the responses are harsh, but they are eye opening. There are people on this site that have been buying and selling 3x as long as I have. When I find answers to my daily questions, I can almost always find the answers here at BP.
Last one for the moment: stick to your numbers. It bears repeating: stick to your numbers. If you want $200/month and a 12% Cash on Cash return for your investment, stick to that number. If you pick 12%, 9% is not good enough, nor is 11.7%. Make your offers accordingly.
Comments (2)
You need to declare one of your units as your primary residence. Your primary residence is where you "live" for tax purposes. When you apply for the VA loan, ask the loan officer exactly how the primary residence applies to your situation. If you believe you are going to be moving, let them know. There are different rules for members of the US military, so make sure you get them ironed out BEFORE you sign the paperwork.
Aaron Montague, over 10 years ago
I am currently in the military and I would love to invest in MFH. A VA loan would be a perfect fit for me to get into my first property, but if I'm not mistaken a VA loan requires me to occupy one of the units with MF properties. I would much rather rent out all the units since I'm constantly moving from base to base. My question is how strict and thorough are lenders at making sure I actually do occupy that unit? I don't want to do anything illegal, but I don't know if it's a big no no or something everyone does and its not a big deal. If anyone has any info on this I would love to here it.
Kris Lawhead, over 10 years ago