Dallas, TX · Member since 2016 · 74 posts · 16 votes
Hello everyone, I am looking to purchase a duplex and owner occupying 1/2 and renting out the other 1/2. I'm not really sure what type of funding I can get to purchase the property that best fits this type of investment . Can anyone help me out ??? Please leave comments and add anything that I may need to be aware of in this type of process. Thanks :)
Investor · Chicago, IL · Member since 2014 · 143 posts · 37 votes
10y
Is this your first purchase? If so, you should be able to finance an owner occupied duplex with conventional or FHA owner occupied financing pretty easily at almost any bank. FHA will only require 3.5% down.
Investor · Chicago, IL · Member since 2014 · 143 posts · 37 votes
10y
Is this your first purchase? If so, you should be able to finance an owner occupied duplex with conventional or FHA owner occupied financing pretty easily at almost any bank. FHA will only require 3.5% down.
Rental Property Investor · Tyler, TX · Member since 2015 · 51 posts · 15 votes
10y
I am making an offer on a duplex to occupy half and rent the other half right now (my first investment property). My finance guy is checking to see if first time homebuyer rules (I qualify for First Time Homebuyers because I have not owned real estate in the last 3 years) will allow a duplex where you rent one side and occupy one side.
Looking like FHA or conventional owner occupy type loans are available for this type of property and I believe that is true for up to a 4 unit property.
Apparently the insurance will need to be a landlord insurance policy... Get enough insurance to cover your contents but not the other unit's contents and make sure to stress to the renter that they really should consider renters insurance to cover their belongings because your insurance policy does not.
Is this your first purchase? If so, you should be able to finance an owner occupied duplex with conventional or FHA owner occupied financing pretty easily at almost any bank. FHA will only require 3.5% down.
Yes, this will be my first purchase. And thanks for the insight ! I'm aware that a FHA loan can be only 3.5 % down, do you know what it can range from with a conventional loan ??
I am making an offer on a duplex to occupy half and rent the other half right now (my first investment property). My finance guy is checking to see if first time homebuyer rules (I qualify for First Time Homebuyers because I have not owned real estate in the last 3 years) will allow a duplex where you rent one side and occupy one side.
Looking like FHA or conventional owner occupy type loans are available for this type of property and I believe that is true for up to a 4 unit property.
Apparently the insurance will need to be a landlord insurance policy... Get enough insurance to cover your contents but not the other unit's contents and make sure to stress to the renter that they really should consider renters insurance to cover their belongings because your insurance policy does not.
Wow, thanks for those tips! I will defiantly be keeping the insurance tip in mind as well as the other tips. Thanks for the feedback.
Investor · Chicago, IL · Member since 2014 · 143 posts · 37 votes
10y
to my knowledge conventional loans typically require 20% down, but I advise you check around as you may be able to get a conventional for a smaller downpayment.
Rental Property Investor · Tyler, TX · Member since 2015 · 51 posts · 15 votes
10y
I am being told that I can get a conventional loan (as long as I am owner occupying one side of the duplex) for more like 5% down.
The one I am looking at is a really old structure in an area that is a national historic district and the neighborhood is experiencing a revitalization... But, this structure needs several small repairs that, I believe, will keep it from passing an FHA inspection. I haven't shared that thought with my lender yet though.
My lender wants to sit down and discuss the benefits and drawbacks of going FHA versus Conventional. I am interested to see what this consists of.
Rental Property Investor · Tyler, TX · Member since 2015 · 51 posts · 15 votes
10y
Thanks Marcus. I am heading out to meet the seller for this duplex here shortly to give her my offer. Getting nervous. First time for me doing this. I still have not lined up the meeting with my lender yet. Possibly this afternoon!
Rental Property Investor · Fond Du Lac, WI · Member since 2015 · 261 posts · 78 votes
10y
Here in the midwest, the same loan officers who are offering traditional FHA financing seem to be offering a "Wheda" plan
Essentially it's a secondary loan that you have to put down on your mortgage
The "Wheda" program to my understanding counts other rents as 100% income (Traditionally i think it's 75% or so)
The advantage to this loan package is that you will not be paying PMI
"Wheda" requires a 5% down payment and the secondary loan is for 3% of that 5, so essentially you get into a piece of property for 2% +\- out of pocket
This was just explained to me this week, I am by no means an expect-- seems like it could be a good gig for owner occupants starting out!