looking to invest in a fourplex

3 Replies

I am 21 years old and looking to invest in a fourplex property. Currently my wife and I manage storage units where we also live ( in the apartment above the office) we pay very little for rent and are happy where we are at for now. We have always talked about owning rental properties and it is something I am interested in. I am currently in training for the national guard and when I get home I want to utilize my VA loan on some type of rental property, Preferably a fourplex. We don't have alot of money and are hoping to get started with 0 down and go from there.

I have no idea what a good price would be to borrow at my age and experience, as well as what the best route would be on the type of loan I can get. 

My goals are to start out with a fourplex that has all units rented out,and hopefully make enough money off all four to pay the little rent my wife and I pay. and put all of the rest towards slowly fixing up the property if needed and paying down the principle of whatever type of morgage we get. and from there I would save whatever I could and in a few years move on to another proper and hopefully retire off of them one day.

My wife and I can handle where we live the next couple of years but eventually would want to move into a rental if we own it or hopefully a house depending on how we are doing financially. 

I am looking for answers on the best rout to go in my situation. Would it be smarter to use the loan on a house for my family that we pay into or a property that we can potentially make money off of Being paid for by the renters.

I am also wondering how I can do this with no money down. Supposidly with the VA loan I can do it for 1$ down but I'm not sure on how loans work and if I could use the va on a multifamily unit.

If you use your VA eligibility you will have to live in one of the units in the 4 plex as the VA loan can only be used for primary residence. The rent on the other 3 units should help you "house hack"--live rent free off the other tenants payments. If you didn't want to use your VA eligibility on the property you could join Navy Federal Credit Union and they offer a zero down loan as well.

Good luck! 

@Mckade White  

Welcome. Thanks for your service. Remember this is a marathon not a sprint. Time to build the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 100 past ones to catch up on.

Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.

Consider checking out HUD homes for small multi's owner occupied gets first crack.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good luck

Paul

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If your starting out, buying a long term hold property is probably not wise.  If you are renting a place right now and do not have a lot of money to buy....  You will probably not have a lot of money to replace water heaters, the roof or evict all of the tenants at the same time for failure to pay (I have a small number of rentals and I swear somehow they all stop paying rent at the same time).  A rental can be the road to financial freedom but if your pockets are not deep enough they can quickly be the road to financial imprisonment.

Your goal should be to make as much as you can with as little risk possible without adding to your workload (opportunity costs). I would recommend looking into owner occupant priority SFH's as a way to capture equity at closing.

Buy a property under value, (exclusive listings from HUD www.hudhomestore.com or priority period from fanny www.homepath.com ) live there for a couple of years then flip it. Wells Fargo REO's also have an owner occupant priority however you will need to find a realtor who knows how to find that kind of deal as they are not marketed blatantly as a Wells Fargo REO

Keep in mind not every house is a bargain on these websites however 51% of the homes owned by HUD sell within the first 45 days ( stat taken from last 5 years of sales history for the Upstar MLS of Northern Indiana )

A SFH will be far more liquid than a multiplex and flipping first will give you the ability to live a little more comfortably, with a lot less risk and a road to having capital through equity in your own home... this can be turned into investment capital through liquidation or refi.