5 Replies

Hi Everyone, 

I am looking to buy my first deal with FHA. I have $20k saved up that I plan on using. My question is as follows:

Is it better to buy a decent, 250-300k duplex in an up and coming location for the 20k FHA 3.5% or max out the county limit on 3plex/4plex and have my family help me out with the difference in down payment (which would be 21k + closing costs) on a 600k property.

It seems like its a much better deal to stretch my dollar and 3.5% financing as far as i can. Are there any downfalls I am not seeing?  Any advice on that strategy?

Thanks everyone!


Make sure you speak with a lender to ensure the you have the money from relatives "seasoned." A lot of deals fall apart because people don't have the money for long enough. 

Plus max it out if you can, use every cent of FHA you can get your hands on.

great question @Hugo Cardona . What are your goals and which Property will help achieve those more expodiciously? 

@Hugo Cardona , I agree with @Jimmy Dudley (and voted for his post, but it didn't register yet?), but I'd also like to emphasize that if you're paying $600k for a 4-plex, is it a property that should already be worth say $750k? ie. I only recommend "deals"! All the best...

If I was in your position; I'd probably use the money to buy the 250-300k duplex... unless you could count on your family members to pay other costs and have the money for rehab/repairs, reserves and for the unexpected, on the 600k houses. I think it would be best to keep some cushion...also is the 600k houses expected to appreciate? I would like to get in on a hot market; tbh I'm trying to build capital so I could get in on an emerging market not too far for me...

To me it would depend on the cash flor of the larger unit. I’m tempted to say max out but only if it cash flows. I’m not sure if you have to pay your relatives back or if they “gift” you the money.

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