FHA Multi-Family without living in it - Partner
Forgive me if this has been discussed, I couldn't find anything on it. I have a great tenant who wants to buy a house next year. He's never done any rental work or investing, but he's very interested. I'm wondering if this is possible:
1. Create an LLC for the two of us
2. Contract to provide him a down payment for a 4-family in exchange for 50% ownership, and agree to be responsible for half the mortgage amount (to the LLC & eachother, not the bank)
3. He acquires an FHA loan on the property himself, and moves in. He gets to rent out one other unit
4. I rent out 2 units
5. After a year or two, he can move out and rent both of his units
Most Popular Reply
@Bryan Faust You can't use an LLC for an FHA loan. It sounds like what you're in need of is a promissory note and contract to cover the agreement between you two. I've never done this personally, but I'd imagine you'd have a signed agreement stating the exact terms of the situation. And then you'd have a promissory note to cover your financial obligation to him, since he'll have the mortgage in his name.
What is the benefit of doing this? This sounds like way too much effort for a weird agreement.
If you're low on cash and can't get a property yourself, then look for creative financing options with property owners. Here's how I landed my first investment property when low on cash:
https://www.biggerpockets.com/forums/223/topics/646426-how-i-bought-a-seller-financed-4plex-in-las-vegas-part-3