Financing Second Deal!

4 Replies

Hello Biggerpockets,

It has been about 18 months since I purchased my first deal of a duplex that I am currently house hacking. I am looking to do the same process of house hacking a multi-family but on a larger scale this time and purchase a quadplex. The situation I am running into is, since I am already financing my current duplex with a FHA loan, I won't be able to pull out another.

Are there any other owner occupied loans that I can take advantage of with a low down payment similar to the FHA 3.5% down. I am not planning to go down the 20% route due to the high price point in the Atlanta market. It'll be ideal to place 15k - 20k down for a quad-plex in my current situation.

Would anyone have any recommendations, or links to a low down owner occupied loan? I took a look at Fannie Mae's Conventional 97, but they have a "one unit principle" which goes against what I am aiming for. With the Home Ready program, I am a bit unclear of there stipulation with already owning a property.

Any thoughts or recommendation if you have been in a similar situation, how'd you manage to prevail?

@Darian Richardson

While it's true that you are not supposed to use FHA for the purposes of bolstering your investment portfolio, changing circumstances like a growing family or job change that's more than 100 miles from your current place of employment can allow for a 2nd FHA loan to be originated.

There is more than one way to buy a house.  You could look for owner carry deals, you could buy with a lease option.  You could mail to plex owners in the areas that you’d be interested in buying, saying you are interested in buying plex units.  Some sellers do not want to have a big lump sum of cash for tax purposes, and may be open to carrying a note back so they spread out their capital gains.

There is a “sweet spot” for potential owner-carry deals in the over-5 unit space, as these require commercial loans.  As you know, you can get 4 units on residential loans.  Bigger multi-family investors look for more doors, so these little guys offer opportunities that you don’t find in other segments of the market. 

@kerry I appreciate the positive insight. Ironically enough I have scooped out a qualdplex in the area, that I look to piece together. Hopefully the owner is in fact "open" to different options of selling the property.