Investor · Columbus, OH · Member since 2013 · 72 posts · 18 votes
After a little hiatus from real estate, I'm back! To make a long story short, cashed out on a duplex to deal another day.
I'm back and I'm thinking more strategically. I want to purchase buy and holds for passive income on multi-units then commercial properties.
What are the least expensive ways to do that? I've heard of people looking for and negotiating deals then finding an investor to pay for deal, then splitting the revenue.
I know there are a million ways to close a deal, with "little" money out of pocket.
Buy a Duplex. Use the loan that I just used to buy my first duplex in MN: Portfolio Conventional Loan, 3% Down Payment, No Mortgage Insurance (yes this loan really exists - - and it works in Ohio and Idaho (I just checked). This will make your monthly payment way lower than an FHA Loan. The only loan other than this that I know of that would allow less down payment would be a Veteran Loan (Vets only). Be alert, if you time it right you might be able to get down payment assistance/grants (I got $5,000 from a local program and used it to buy my interest rate down to 3.125% which is way below typical market rates for a Duplex). There are also many down payment grants for first time home buyers in the Twin Cities right now.
Don't start with an FHA Loan, instead use it for your 2nd Duplex...because the 3% down Portfolio Conventional loan that I used requires that you do not own any other homes at time of closing. So start with that then move to a 3.5% down FHA. Once you have an FHA loan you are not allowed to have another FHA loan unless relocating a great distance for work.
Now that you have exhausted your Low Down Payment Options (Portfolio Conventional and FHA Conventional and FHA) you will need to use a Standard Conventional Loan and put 20% down to get your 3rd Duplex.
The sky is the limit...you could continue to buy properties and build an empire or just stop there and enjoy more free time...I have friend who quit his job and just manages his properties now.
Keep in mind that this 4 step process I outlined takes time (anywhere from 1 to 10yrs depending on the person) so keep the big picture in mind but don't let it stress you out too much. Send me a message if you have any more questions and keep us posted on your success! GOOD LUCK !
@Jonna Weber Thanks! It's on my ever-growing to-read list! It looks great!
@Conor Hesch Thanks! I own a primary residence condo, which may make FHA loans more complicated. I'm looking at private, creative investing. I will keep you posted!