multiple loans

7 Replies

After reading the fha loan requirements I realize it will be a 3 years before I can begin to invest in real estate. I would like to know if I can get a fha loan and multiple conventional loans all at once. I believe that with that amount of time I could have excellent credit,  enough money saved for a fha loan, and the 20% the bank requires. If possible than I would start with 2 multifamily properties. What do you think?

You can have an FHA loan as well as up to 9 additional financed properties. However, the FHA loan must be on your primary residence which is owner occupied. Where do you get the 20% from? The bare minimum down payment on an investment property is 15%, and that's for a single unit property. As soon as you get into duplex, triplex or four Plex down payment jumps up to 25%

You may want to consider getting a four Plex and living in one of the units. Using an FHA loan, you'll only have to put down 3.5% and the guidelines require that the rent of the other three units cover your entire mortgage payment: principal, interest, taxes and insurance. Thus, you are essentially living mortgage free.

Feel free to private message me if you have any additional questions

[email protected] | 360‑927‑0959 | http://www.patbritton.com | WA Agent # 120557

@Drae C. 

I don't believe there's any specific restriction on financing one property with a FHA loan (that you'll live in) and then a rental property with a conventional loan, both around the same time. I think the hardest part would be the qualify for the rental property loan "as is" (ability to afford two mortgage payments at once). Once you have the rental income on your taxes for two years, then they'll consider some of it when getting approved for a loan.

Hope that helps,

- Tom

While I can't speak for other lenders, I know that we do not require two years' rental income before counting it. What we would take instead of a schedule C would be lease agreements and copies of canceled checks, signed by the bank.

Furthermore, if buying an investment property that does not have renters, but will, we can consider 75% of fair market rental income. We then take 75% of this and add it to your gross income. Thus, while not completely offsetting the new payment, it will most definitely help.

[email protected] | 360‑927‑0959 | http://www.patbritton.com | WA Agent # 120557

I think Patrick's first piece of advice is spot on.  That's exactly what I'd do!

Things must be different in other parts of the Country. Patrick says they get 25% down on 2-4 family. I just bought a 5-family this past summer and my bank only required 20% down. I also asked them what they would need if I wanted to finance another 2-4 family property, and they said the same...20% down.    

Hi guys,
Will the bank consider 10% down payment and 15% seller financing for a investment property?
I am trying to buy a 4 unit multi family for which I have only 10% down payment.
Thanks
Gowri

if it's 5 or more units it's considered commercial, in which case there are different guidelines.  maybe that's why they gave you it for 20% down.  as well, portfolio lenders may have different guidelines.  I have to follow Fannie :(

you can get an investment property for 15% down, but it's limited to 1 unit properties. 

as for "mixing" your own down payment with seller financing, i cant think of a bank that'll do it. either go FHA and live there, limit yourself to 1 unit, find a portfolio lender or get complete seller financing.

[email protected] | 360‑927‑0959 | http://www.patbritton.com | WA Agent # 120557