First-time home buyer financing and time frame.

3 Replies

Hi all, Relatively new here and looking at my first property. I got pre approved for a standard FHA loan. I am thinking of buying a duplex, triplex or fourplex while also buying another cheaper property to flip. I will be living in the "plex" while renting out the other units. This is all in Virginia and/or Maryland. So my questions are: 1. What do people think of this beginning strategy? 2. How long MUST one live in the property on an FHA loan like this? 3. These multi family properties don't seem to be as common around here. Might finding a lot and building a plex new be an alternative? Maybe finding a house and converting it? 4. I've read about umbrella loans. I could not buy both properties under this loan? Could I potentially get 2 loans? Any ideas? I hope I hit all the points I wanted to hit. Please share any other issues you see with this plan! Maybe others starting out can benefit from this information. Thank you everyone in advance! -Nick
And why does it not break the lines like when I am writing it? Sorry about that!

Hi all,

Relatively new here and looking at my first property. I got pre approved for a standard FHA loan. I am thinking of buying a duplex, triplex or fourplex while also buying another cheaper property to flip. I will be living in the "plex" while renting out the other units. This is all in Virginia and/or Maryland. So my questions are:

  1. 1. What do people think of this beginning strategy?
  2.  
  3. 2. How long MUST one live in the property on an FHA loan like this?
  4.  
  5. 3. These multi family properties don't seem to be as common around here. Might finding a lot and building a plex new be an alternative? Maybe finding a house and converting it? 

  6. 4. I've read about umbrella loans. I could not buy both properties under this loan? Could I potentially get 2 loans? Any ideas?


I hope I hit all the points I wanted to hit. Please share any other issues you see with this plan! Maybe others starting out can benefit from this information. Thank you everyone in advance!


-Nick

Attempting to make this a bit more organized.

Hey Nick! 

I agree that there are not many multi-plex units in this area(MD/VA). I have found a few in the Frederick County area(MD), but take a look at loopnet.com to find multi unit listings.

Here are my recommendations(and I am also new to real estate investment so take my recommendations with a grain of salt): 

1. The strategy seems good if you can find a good deal on a multi family unit. Just make sure the numbers work. Sometimes the numbers on a single family home are better than those on multi units. 

2. My understanding is that with an FHA loan you must have the intent to stay in the property for 1 year, which to me means you could theoretically move out earlier if something unexpected occurs. Also, remember that if you get an FHA loan, you will be paying mortgage insurance!

3. I do not have experience with converting single family homes into multi units, but again if the numbers work and you can get all the required permits to do so, then I do not see why not. 

4. I do not know much about umbrella loans, but it seems like they are more for debt consolidation. If you have multiple credit cards/loans you can get an umbrella loan to pay for all the debt and make a single payment to the umbrella loan. I do not know if you can buy properties with one of these loans. They seem to be used more during refinancing. 

Hope that helps, 

Felipe

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