Hi BP Fam!
My wife and I currently own a condo, but I'm looking to rent this out and house hack a 4-plex.
With the price of units in my market, it would take me years to save up the down payment for a multi. I realize that there are ways to get a residential loan that considers rental income (if someone could elaborate on that, it'd be great) but I don't know how or what questions to ask to look into it properly.
I was thinking of ways to creatively finance this. My thoughts were as follows:
I get a third party lender/investor to come in with the down payment of 10-25%. I take the mortgage out in my name. We would then live in one unit, use two units to pay the debt service and operating expenses, and the fourth unit goes to the lender/investor to pay off their position.
Obviously, I don't have any numbers, this is just a general idea. Of course, it would only work on a limited number of properties, but it should be possible, right?
Does this sound attractive/doable to anyone?
If you were an investor with funds, would you go for something like this?
Do you have any suggestions or improvements to this idea?
Sure, you could probably find an investor willing to do that if you make the return % attractive enough for them.
If you're doing it owner occupied, you could also use an FHA loan which only requires 3.5% down. Or better, if one of you does not have the condo in your name, that person can get a conventional 5% down loan for up to 4 units through the HomePossible loan. But the person using HomePossible cannot have owned any property in the last 3 years.
@Robert Freeborn You can accomplish the purchase by yourself with a 3.5% down FHA loan. No partner required. For a multiunit the rent from the other units would be credited to you on the purchase loan, so as long as you find a good property you shouldn't have and DTI issue.
Unfortunately, I think the loan is in both our names. I'd have to double check on that.
I had ignored FHA because I though we couldn't use it since we already own our condo. (Which we would rent out once we had the 4plex)
I would far prefer to own it without anyone else in the picture.
You do not need to be a first-time homebuyer to use an FHA loan; you just can only have one FHA loan at a time. So as long as you don't have that on your condo, that should be an option. Yes, much cleaner than bringing in an investor.