I'm planning on buying a duplex or triplex mainly because I want to rent the other units. I think this is a great way to start my Real State journey as an investor to then continue on buying other rental properties in the future. I have read a couple of Real State books and watched plenty of videos to be informed. I feel the time is right to start. I am still deciding if the FHA or Conventional loan would work for me because I see the house as an investment not only as a place to live. Here is where I get confused. There￼ are a lot of videos that suggest that the conventional is better because of the mortgage payment being lower then the FHA loan. Also, it is mentioned that FHA has other higher expenses. However, if I choose to use the FHA loan and the math or ROI works should I really be worried? Or should I wait and safe more money to use the Conventional loan?
The main difference between an FHA and Conventional loans is that with an FHA, you can put down as little as 3.5% to get a loan (as opposed to 20% with a Conventional loan). The monthly cost of an FHA loan will be higher because the loan amount is higher (96.5% LTV instead of 80% LTV) and in most instances you will be paying mortgage insurance with an FHA loan.
My opinion: if the numbers work and you have a good ROI with an FHA loan, do it. Interest rates are still historically low and are likely to increase in coming years. With interest rates as low as they are now, you should leverage more of this 'cheap money' as long as the monthly ROI still works!
Just want to clarify/confirm that is for multi-families. With a single family, you can put as little as 3% down!
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