House Hacking in the Midwest
Hello BP community!
I would like to get some advice from the seasoned investors here. I am located in Davenport, IA and am looking to get into investing. I sparked the idea of starting out with a multiplex. I had previously planned to purchase a single family home with conventional financing and 5% down. Long story short, it fell through because of the seller. I had planned to use the same financing I already had lined up on this house for the multiplex. I recently learned I would need 15% down for a duplex, and 25% for a building with more than 2 units. This applies for both Conventional and FHA through my financial lender. Being 21 years old with limited funds, this sounds like it wouldn't be the way to go. Even if I could afford the down payment, I wouldn't have an emergency funds stash if something went wrong. Now I am thinking a single family home with roommates (which I have done before with rentals, and the thought of doing again terrifies me.) is probably my best bet. My questions:
1. Is there still a way or a lender that could get me into a multi-family with 5-10% down? I would prefer to stay away from contract sales.
2. If I decide to go with a single family, I have my eyes on a HUD house in a C neighborhood. It is about 2300 SQ FT with 4 bedrooms. The HUD inspector says there is a minor plumbing leak behind the walls. I have to pay $150 to de and re-winterize. Either way, I would be hiring a plumber to get a second opinion before purchasing as I know plumbing can be a real pain. This would probably eliminate the need to de-winterize. If I could get this place at the right price, I would likely try to go with an FHA 203K loan to make some minor repairs and fix the plumbing. Does this sound like a good choice if I can't secure a multiplex?
Thanks in advance!
-Alex Bock