Hi BP Family, my husband and i would like to start investing in rental property. We are currently renting, but would like to purchase our first multi family unit. My question is can we purchase a multi family live in one of the unit and rent the other units out? Should we use an investment property loan or a regular mortgage loan? My goal is to stay in the unit for a short time until we can purchase a single family home.
@Adetta Samuels-Agard Yes, and as long as you plan on living there for at least a year, you could get an fha Owner Occupied loan with as little as 3.5% down.
@Wayne Brooks thank you.
You would not need an investment loan (25% down payment) and are fine for 3.5%-5% down as long as you're OK with paying PMI. If not, you can opt for 20% down payment but at any moment, if it's your prerogative, can put down more if you'd like. Best of luck!
@Lien Vuong thank you
See if you can find a conventional for 5%, so when you're 20% in, you can drop the PMI. Best of luck!
Why not? Get the mortgage that will give you the better terms. If you live in it, you might be able to get in with a lower down payment. As Christopher mentioned, if you do 20%, you get rid of the PMI. If you are wanting to buy a single family home just down the road, you may want to save some of that money.
When running the numbers, do it without you living there and with you in one of the units. Your living expenses should be lower than they currently are.
Yes, this is possible it is called house hacking if you want to google it to learn more about. I would run the numbers both when you are living in the unit and when you decide to rent all of them out to make sure you get cash flow both for both times.