Hi, Everyone I’m new here to BP. I’m 23 and just bought my first 3 family unit in Fall River, MA. 2 months ago. My goal is to replace as much of my income as possible with passive income.

The property is cash flow positive.

The mortgage on the property is $1303 with taxes and insurance. 

The property has three 2br units and the rents are as follows with tenants paying all utilities but water :

Unit 1: 800

Unit 2: 750

Unit 3: 650

(Unit 3 is mine and a room is rented out to a friend) 

I haven’t received my first water and electric bill for the house lights but those shouldn’t be too excessive.

I want to start working on putting together a deal for another multifamily with 3-4 units in about a year. Would I be able to use the income from the property I currently have to qualify for a loan in 2019,  if it gets claimed on this years taxes even though it was just purchased in the last quarter of the year and then claim the income in 2018.

Also I used a ‘masshousing’ loan to get this property, would I be able to use a fha loan for an owner occupied property the next time around and only put down 5% ?

Last question for when I eventually get into something bigger than 4 units. Are there any banks doing 15% down on commercial properties these days? I thought I saw a post about a national bank that does a while ago but can’t find it. All I’ve come across are requiring 20% down.

@Alexander Owen

I'm not familiar with "masshousing".  Is that a grant program through the state?  If it is, does it require owner occupancy?

Your question about FHA is a good one but the answer is going to depend on the first. Be careful to not use owner occupied products/programs for investor properties.

I don't know anyone doing 15% down for commercial.

Read through the selling guide (link below) and then contact Rob Haser @ Movement Mortgage.  He is a financing expert and can give you more specific answers to your questions based on your specific qualifications.  If you need his number, PM me.

Best of luck.

Stephanie

https://www.fanniemae.com/content/guide/selling/b3...

@Stephanie Potter thanks for the reply. And it’s not a grant, it’s state specific  first time home buyers mortgage program that is offered with lower pmi and interest than others in the area and it did require owner occupancy.

I only ask because the area where I bought isn’t the best but isn’t the worst if that makes sense. I don’t mind living there now but I’d rather live  in a better area if that would be possible with an fha loan then I’d need less capital to do it.

@Alexander Owen

Was there a time requirement for owner occupancy or are you free to buy another property?  Do you have to pay anything back if you move out before the time requirement is satisfied?  Somebody had to pay to get lower pmi and interest; were there any strings attached?

Hi Alexander Owen, yes, to being able to buy the next property using FHA, but they will want you to refinance the MassHousing loan into a conventional product first.

I actually used the exact strategy you are contemplating to start my empire 3 years ago. I currently own 11 houses with a total of 35 units between my partner and I. We have a handful of Comercial lenders local to Fall River where I live and operate my businesses, who will go down as far as 10% down on the loan as long as you can get the seller to hold a note for 15%. Which is possible on most commercial deals, as the sellers are generally investors also.

I run a full service, real estate, property management and investment company in Fall River and would love to jump on a quick call to discuss your goals. Send me a private message and we can see what the best steps would be for you and your goals.

Cheers to our success!

@Gualter Amarelo We have to connect on financing for sure! 

@Gualter Amarelo

I'm looking into local commercial property, can I get a referral to the banks you are working with those are great numbers !

Tom

@Gualter Amarelo

I agree, those are great numbers you found for your loans!