Hi BP forums,
I am very new to REI. I am interested in purchasing a multifamily home in Los Angeles CA or surrounding areas. The idea is to occupy one unit and rent the other units out.
I have never purchased a home and my credit is very poor at the moment so I am sure I have a lot of work to do before I can qualify. I am wondering what type of credit is needed for this type of purchase and if there are any first time buyer opportunities I can look into or any other creative financing ideas that may be of interest for this type of purchase.
I would greatly appreciate any feedback.
Welcome! A good personal credit rating is huge so I suggest get started on that.
Erik Kaplan at THD Credit consulting does fantastic work and will give you pointers on where to begin. He is Los Angeles. Reach out to him with your issues and see what he suggests.
All the best!!
Very much appreciated Francis. Thank you!
@Daniel Mawyin Not sure what the problem is on your credit, but it will take you a couple of months to fix it (unless it is bankruptcy or short sale issue). You need FICO score to be above 580 to qualify for FHA with 3.5% down. I usually see a couple of good 2-4 unit buildings a month in Los Angeles that seem like a smart investment. If you're doing conventional loan with 25% down, you won't have a problem finding even more of them. If you're doing FHA that's when things get tricky, especially on 3 and 4 units.
We got started with personal properties at 23. First time home buyer loans are a great way to get your foot in the door. Therefore due to their leniency they tend to be "very" a great way to get started.
Many people on here buy a multi-plex. This way they can have there own place and still have rentals. In our areas those never made sense, so we bought single family and rented them out when we transferred. If you are in a position to rent rooms out of your house. This is another great way to live frugally, build equity and have someone else pay off your mortgage!
Let me know if I can help! Good Luck!
@Ewa Reza thanks for the reply. No bankruptcies or short sales. A couple months would be wonderful. Most people tell me at least 6 months to a year to begin seeing some decent improvement. Do you have any recommendations with regard to services or strategies I could use for my credit repair? Any additional information is greatly appreciated. I would most likely be looking into FHA loans as 25% is out of my reach currently. Hope I can pick you brain a bit more in the future. Thanks again!
@Elizabeth Colegrove thank you for the information I will most definitely be looking into first time home buyers programs when the time comes. Renting rooms out doesn't work for me as I have a wife, son, and another on the way otherwise this would be a great way to offset my costs. I figure a multiplex would lower my monthly expenses and allow me some cushion to work on other investment opportunities.