House hacking

[Josiah Mosley]

I am wanting to house hack a duplex in Kansas City that is currently listed for 114k. This would be my first purchase as a REI. The problem is that I am fresh out of college with no full-time job or steady income yet and I am still living in Oklahoma City (moving to KC next month). Is there any way I could somehow receive an FHA loan or is there any other way of financing the property, such as private money? Or somehow lay no money down as @Brandon Turner discussed in his book? I would love to receive some feedback!

[Brian Gibbons]

Originally posted by @Dawn Vought:

Josiah - with a rent-to-own lease, you should build up rent credits every month that accumulate over time to go towards your down payment.  It's usually a certain percentage of the rent.  For example, I usually give about 20% rent credits to my lease option tenants. 

You could also maybe offer to "help out" with the management of the other tenant to the existing owner, thereby learning and gaining experience as you go, and maybe negotiate a higher rent credit in exchange that will ultimately save the existing owner money.

 Hi Dawn,

It is the opinion of many here at BP that due to Dodd Frank and the Safe Act, rent credits constitute a "financing arrangement" and require a RMLO to underwrite the buyer.

It is prudent not to include rent credits subtracted from either purchase price or down payment.

What can be done is a rent credit to be used as a seller's concession toward closing costs.

1. Landlord/Optionor agrees that upon exercise of the option, Landlord/Optionor shall contribute $_______________to be applied towards funds to close (Seller Concession) to the Tenant/Optionee if and only if the option is exercised. If the option to purchase is not exercised, for any reason, there will be no refund of any rent, option fee or concession.
2. (NOT LEGAL ADVICE - SEE AN ATTORNEY)