I’m going to buy my first real estate investment
I am staying in my great rental in Brooklyn in a prime location where I’ve lived forever.
-FHA for multifamily idea 3% down
- Fannie Mae / Freddie Mac 3% down
-My dad was a vet. Family property in nyc was bought with a VA loan.. I can't get the VA loan I know go through VA credit union.
Investment property options:
1. Multifamily property in Bronx w FHA loan
2. Condo in Brooklyn in a less desirable area with a conventional loan or a Freddie Man/Fannie Mae approved condo for the 3% Down
Tips please! Am I on the right track ?
Thanks in advance
In my opinion, a multi family is always going to be the better investment. That being said,
it really depends on what you can get approved for. There are many factors such as credit rating, income, purchase price, location, property specifics, etc. that will weigh into this.
My advice would be to start off by contacting some banks to determine what they are willing to lend you based upon your options outlined. Once you know what you can qualify for, you will be better educated to look for properties within your price range and requirements. I have not used a FHA loan, but if you are not planning on living in a property, you will be applying for an investment loan(non owner occupied). My experience has been they require 20-25% minimum down payment(depending on bank).
Best of luck,
Alex Furini, RA
Good morning Michelle,
I think being able to obtain funding through a program affiliated with veterans will be a very beneficial. Make sure you take time to do plenty of research before you move forward. I am not particularly well-versed in the financing side of the business but look for a broker that is willing to take the time to walk you through your options and not pressure you. You want to work with someone with whom you feel comfortable BUT someone who gets stuff done! I missed out on a great rate once because the loan officer was too slow and I missed a deadline.
Next, about your deals:
1. Do not invest in a condo if you are not going to live in it. This is an easy one because you will lose money.
2. In the NYC Metro area it will be 99.9% impossible to buy something with 3% down. This is for 2 reasons. First, the property will not cashflow and you will be paying significant expenses out of pocket. Second, it will be a rare seller indeed who will choose your offer with 3% or 5% down instead of someone else who will put in 20-25% as they will have more skin in the game AND they appear to be more financially secure in that they can afford to pay that amount.
Now that I'm done being a negative Nancy, I think the multifamily option is the right track. The first option is to find a 4 family that you can afford AND that will cashflow without you living in it. Good luck! Any time you want to talk more, I'd be glad to help!