Want to buy a 4plex.. need advice

8 Replies

Hey guys and gals I have run into a decent multi family opportunity... to make a long story short, they are building new four plexes (its actually 4 townhomes with one tax id#) And i have the opportunity to purchase one($585,000) (146,250/door).

Rents will be $1250/unit $5K/mo. I will owner occupy one unit for a year or so.. i could get enough for 10% down. I only have one year tax returns being self employed... Anyone have any ideas ? I hate to pass this good of an opportunity by because most multi's in my area are from at least 1950 and most are pretty run down. This has a good return, i just have to figure out the financing

Are you unable to get traditional financing?

I have great credit 760+, the problem is that i only have one year tax return as a realtor. I was a loan officer the year before that, and most jumbo loans require two years self employed history... so i have to get creative...

Would the lack of income history preclude you from getting a 203k loan? What kind of financing were you looking at @ 10%?

How do you calculate this a good return? Is there some great potential for appreciation? There's not much income there after property taxes and expenses.

@Jordy Clark ; I'm with David. Without very favorable loan terms, your cashflow is probably negative. Not sure this is a good deal.

@Jordy Clark I am also in agreement ... that's pretty expensive per door for me too, especially at $1250 monthly rent. I would be looking for a higher ROI. If your concern is not being able to have the cash up front, or the financing in place, it would be a pass for me. Just too much money invested, too little equity, and not assuming any appreciation (which I find is more dangerous to do than anything) ... sounds like it might be a pass.

Good luck!

Originally posted by @Jordy Clark:

Hey guys and gals I have run into a decent multi family opportunity... to make a long story short, they are building new four plexes (its actually 4 townhomes with one tax id#) And i have the opportunity to purchase one($585,000) (146,250/door).

Rents will be $1250/unit $5K/mo. I will owner occupy one unit for a year or so.. i could get enough for 10% down. I only have one year tax returns being self employed... Anyone have any ideas ? I hate to pass this good of an opportunity by because most multi's in my area are from at least 1950 and most are pretty run down. This has a good return, i just have to figure out the financing

 Hi Jordy,

I could qualify you on 1 year self employment tax returns, did you file a schedule C for 2013?

The caveat is 25% down payment with conventional financing whether you are a primary occupant or if you're non owner occupying it.

There is a special conventional fannie program called my community mortgage that can finance a first time buyer with as low as 5% down on conventional but that program has income limits based on median income. If you haven't bought, owned, or lived in a primary dwelling in the last 3 years and you make within the income limits then you may be able to qualify for a MCM conventional loan as low as 5% but I believe MCM is two years tax returns.

So what do you do? file 2014 in March 2015 (assuming you have 2013 filed) and you'll have two years and use MCM 95% LTV financing.

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