FHA House Hacking DUPLEX-Options?

Question

Hello Everyone!

I m a newbie investors,I been looking for a duplex,triplex to house hacked and this week I found a duplex in Orlando that I'm debating what action to take.

here is the property information..

-Multi-Family Home 4 Bedrooms4 full Bathrooms

-1,736 sqft

-Built in 1986

-Front unit needs work around $6k (floors,a/c and cabinets) tenant pays $575 month

-Back unit is in way better shape but tenant pays $400 since the work on the unit was done by them  (needs minor repairs at  $2k to upgraded)

Seller is asking $110k (property has been trying to sell for  100+days)

I ask my agent to offer $65k but the counter offer came at $75k.......

I think we can get a deal at $70k not 100% sure

I'm undecided on what to do ?

I believe I can buy it and live in one side and rent the other but front unit needs work asap.

-Can I get approved fha even if one of the units needs to be rehab?

-Do I use FHA 3.5% and government Assistant  if offer to me?

-Conventional at 5% plus closing cost?

Already pre approved for FHA  but  Im thinking about living there for a year than moving and rent both sides out

After repair on both of the units each side can rent for $675-$775

or should I wholesale the deal to a cash buyer?

sorry for the crazy explanation and I hope you guys can help me decide?

thanks,

Carlos Guzman

Rico S. · Answer

@Zainab Sajid

House Hacking is a term used for an owner occupied investment. Where you are essentially living for free while getting the loan paid down and receiving  enough income to potentially cashflow. House Hacking Search

Lesley Govan · Answer

Hi Carlos,

I'm a newbie but have been looking into house hacking a multi myself and have looked at FHA financing. If the numbers work, why not do the 203k streamline (FHA)? You can use up to $35000 without an FHA inspection. Fold it all (repairs and mortgage) into one loan and go! You also only have to put down 3.5% but just remember you will be paying PMI with 3.5% down, and that doesn't go away until you refinance out of the loan. Just make sure your numbers work after all expenses and you cash flow. Run the numbers as if you will not be living there.

Just my 2 cents.

Good luck!

Lesley

Account Closed · Answer

Get the property ASAP after due diligence. Go ahead & live in one unit while fixing up anything else, even if you get the FHA loan.

How much does it cash flow (NOI)?

Christopher Giannino · Answer

@Carlos Guzman if one of the tenants is leaving then you should be fine because you can be an owner occupant. If both units are occupied and will be for a long period of time you might not be able to be qualified for an FHA loan. I would talk to your mortgage broker to find out the exact specifics. Regardless make sure you do your due diligence and being that you're acquiring a property with tenants that means to review the leases. I would recommend reading @Brandon Turner book The Book on Managing Rental Properties. It'll help with all the questions you might have during this process.

Carlos Guzman · Answer

Rico,

I made the offer just waiting for the seller to make a decision and yes I will do that if the deal goes thru.Now can I work on the unit with most of the repairs needed and not actually live there until is all done?

thanks Rico,

CG

Carlos Guzman · Answer

Chris,

what if one of the tenants is leaving soon?What can of scenarios can i run into?What if they both want to stay a bit longer?I wont be able to do the deal? and if i have to honor the lease could i work on the units before moving in?

thanks alot ...

i will keep you posted for sure

thanks

CG

Carlos Guzman · Answer

Lesley,

I completely forgot about using 203K FHA....I'm working on making the numbers work and I will make a decision.I think its a really good deal and I appreciate your advice and knowledge..

I will keep you updated it for sure..

thanks again,

Carlos

Rico S. · Answer

@Carlos Guzman

Seems like a good deal to get you started. Why not offer 70K? Also what if you live in the one that needs the work and increase the rent for the unit thats in better shape. While living in it you can make the necessary improvements. If that is an option you are okay with. Just a thought.

Keep us posted. I would love to hear the outcome.

Best Regards,

Rico

FHA House Hacking DUPLEX-Options?

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