Hi BP! I’m new to the idea of real estate investing, but I’ve got a few question.
One interesting thing I've read is using an FHA loan on a fourplex, then living in one unit for a year is possible. And I think it's a good idea. But I'm a little confused on something.
Let’s say (for simplicity) I buy a fourplex worth 100k with 3.5% down ($3500). Then, due to inflation, the house goes up in value $3000 dollars (which is appreciation I gained because I now own the property). Did I not just make an ~85% return off of inflation (assuming not other costs)? Because that inflation is on money that’s not mine, so I capture the benefit?
Also, can I do an FHA on a quadplex, get 20% equity then convert it to conventional then do it again? Should I hire a property manager for a property I live in?
First off, yes you own that appreciation. The bank solely loaned you money, they did not lend you the home.
To answer your second question, yes you can. You will have to refinance your current mortgage, but the FHA must approve of it first, even though you are moving to a non-FHA-insured lender.
The property manager question is very situational. If you are prepared to manage your tenants and advertise vacancies, you can easily get by without having a property manager. Property managers are great later on when you have multiple properties as they can take some of the grind out of the sport, freeing up your time and head space for other matters. I would recommend reading The Book on Rental Property Investing by Brandon Turner to further increase your knowledge.