Financing Question

4 posts by 4 users

John R.

Real Estate Investor from Northern, Colorado

Jul 11 '11, 10:46 AM

Hi Everyone,

Is it any easier to get financing to purchase a multi-family rental if I plan on living there?

Loc R. Donor

Note Investor from Pasadena, California

Jul 11 '11, 10:55 AM

Yes, as long as it is 4 units MAX. 5+ is commercial, regardless of whether you live there or not.

Brian Morgan

Real Estate Investor from Dracut, Massachusetts

Jul 11 '11, 12:10 PM

I did just that with my first rental property.

I had little capital to start off with, so I decided to find a 4 family to rehab and live in. I used an FHA loan and was able to put 3% down instead of the normal 20%-25%. I also took a 203K rehab loan as part of the package to use for renovations.

Since I choose to renovate, it gave me rehab experience and an instant equity position. Becuase I lived in it, I also gained valuable landlord experience. To start, I managed everything myself for a cash flow boost.

It's been a few years now, and the property is still doing well for me. Just make sure you factor in all the costs and expenses before you buy. I could've really sunk myself if I didn't have a good grasp on the numbers.

Victor Wuamett

from Albuquerque, NM

Jul 26 '11, 10:45 AM

by the by, I had an investor buy a 4-plex this year, and his lender would not let him put the property into a LLC. He couldn't get around it, and he was a lawyer, too. may have just been his particular lender, but ask the question when it's time to borrow.
I had a quote this week from a lender for a 4.5%, owner occupied loan on a 4-plex. How can anybody not love thos terms?
good luck

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