4 SFH on a single loan?

Question

I'm looking for the holy grail of financing, and I'm wondering if this would work.

If I were to purchase/ construct 4 homes on a single/ continuous lot, would I be able to finance them with a single conventional or VA loan?

I know this is possible with connected fourplexes, but I'd prefer 4 detached properties if possible.

Doug Spence · Answer

@Tyler D. Not possible with a VA loan. The purpose of the VA loan is to provide an affordable lending product for military members and veterans to LIVE in - not an investment. The VA loan rules allow for a 4plex because you can live in the structure as a primary residence, and rent out the other units. The VA would not lend on 4 separate properties as your 'primary residence'.

Andrew Postell · Answer

@Tyler D. hmm, so to answer your question directly this would likely NOT be possible with Conventional/VA types of loan.  Usually a commercial loan is what would be needed here.

The main reason it doesn't work with Conventional/VA financing is because they rely on "Sold Comparable Properties" or sometimes called "comps".  So how many separately built 4 house lots are in your area?  Probably none.  Now, there might be some quads...but that's not a realistic comp.  So even if the appraiser did use some of the 4 unit buildings to measure against yours the adjustments the appraiser would be required to use would throw the value off too much.  There's always an exception here but 99.9% of the time that would be the main hinderance here.

And just to be clear, could you build 1 property and use a VA loan...yes.  Same with conventional.  Could you build a 4-plex?  Yes.  I would imagine both of those would be a positive response in most of the country but having 4 separate single family homes on the same plat of land would be pretty challenging.

Hope all of that makes sense.

Bill B. · Answer

You don’t think you’d lose $100’s of thousands not being able to sell each house separately? Going to be a Rare buyer that wants to buy 4 single family homes.

Caroline Gerardo · Answer

You could buy completed existing four units all not connecting on one lot (one plat map with 4 houses). However, the only construction lender for that is hard money. New built probably not going to cash flow when you factor in all the costs.