FHA loans and multi-family rental

[Amaf J.]

Hello,

I've been looking at multi-family properties, mostly four-plex, to see if I can find a potential property to purchase. I did research on how to analyze properties to see if the deal makes sense or not. The kicker is that I can't find a property using a down-payment of 3.5% with a FHA loan w/o having to pay out of pocket? Is this normal or not?

Can the gross rent roll ever cover the expenses w/ mortgage payments at a 3.5% down-payment? Based on my math it's hard to find that realistic. 

[Anthony Gayden]

Originally posted by @Amaf J.:

Hello,

I've been looking at multi-family properties, mostly four-plex, to see if I can find a potential property to purchase. I did research on how to analyze properties to see if the deal makes sense or not. The kicker is that I can't find a property using a down-payment of 3.5% with a FHA loan w/o having to pay out of pocket? Is this normal or not?

Can the gross rent roll ever cover the expenses w/ mortgage payments at a 3.5% down-payment? Based on my math it's hard to find that realistic. 

The problem is your market. It might not be easy to do in more expensive markets. I live in Tucson and bought my 4 unit with an FHA loan and 3.5% down for $152,000. With PMI, and 30 year amortization, and including taxes/insurance the payment is $1080/month. Gross rents for the other 3 units where I don't live are $1800/month. I live for free, and get paid a little too.