Financing Multiple 3 or 4plexes..

3 Replies

Hello all,

Long time lurker, here.

I'm looking to purchase an owner-occupied (me+and the gf) tri or 4-plex in the San Diego area, and I am hoping to do multiple deals in the next year or two. I'm pretty bullish on the rental market here.

Now the question is, how do I want to finance these projects.. I'm weighing different 1,2 combinations of FHA, Conventional, and ARM. My question is - would it be prudent to finance a triplex/4plex with and FHA loan, and then use an ARM for the next?

I was thinking that, for the first few years, the rental income from the 2nd place could be diverted to build enough equity in the 1st to refi out of FHA. My thinking is, the ARM on the 2nd place would keep payments to a minimum for the first few years, and I'll always have the option to refi out of that later down the line (if and when payments go up)..

What are the flaws in my thinking??

Thanks for your help!

@Joshua Goldberg great thinking on the FHA to start. I would just be hesitant to do a ARM as rates are so low. In a few years when you go to refinance they could be much higher at that point.

Thanks for the response, @Jerry Padilla!

Agree with @Jerry Padilla nothing to really add ...the FHA is a great way to start, esp if you're going to be getting into a tri or 4-plex.

If I were you, I would probably not go for an ARM and just lock in the rates where they are, as they are probably not going to get lower.

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