5 unit multi family housing

2 Replies

I am currently 21 years old and have interested in investing in particular real estate. I want to own a 5 unit multi family house in approximately a year from now or when I graduate college so I can live in one of the units and rent out the rest to tenants. I am looking to save approximately 20,000 for a down payment and absorb as much information as possible in a year so when I have enough for the down payment of a typical 5 unit multi family house I can just buy the property as smoothly as possible. Can someone provide me a roadmap or give me some advice from now till a year to get on the right track.

Look constantly for a place to buy so you are very familiar with a good price. And keep in mind you will need 25% down so $20k may not work. Unless you get something super cheap in a bad neighborhood. But then, banks don't always like to lend in bad neighborhoods. Consider a 2 unit place.

Hey Dustin, welcome to the forum! 

If you're trying to buy a multifamily with just $20K down in a market like Chicago, your best bet would be to go for an FHA 203k loan, since it sounds like you're wanting to live in one of the units.

The 203k loan allows you to put as low as 3.5% down as long as you're going to be living in the building yourself and you build renovation costs into the loan. And since a duplex in some areas of the city can run $400K-$500K, you're going to need every bit of that $20K to make a down payment, even at 3.5%

You'll also likely need someone to co-sign the loan with you, given your lack of credit history and just coming out of college. 

Hope this helps! 

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