How to buy Quadplex. First time

Question

A listing for a quadplex came up for 180,000 and I was wondering if there is any other way then putting 20% down to get a loan for it. Like commercial or portfolio l

Joseph P. · Answer

Thanks for all your help. Talking the wife into this is going to be hard enough. Talking her into moving out of our newly built home on her family's land will not happen. So I wouldn't be able to do that so I guess coming up with the 36,000 is my only option

Kyle Smith · Answer

@Joseph P. The best way is going to be do an FHA loan! A quadplex is what I’m currently looking for as well, maybe a duplex. Punchline: FHA only requires 3.5% down on the purchase price and can work on a small multi family 2-4 doors but not 5.... also keep in mind you must live in one of the units for 1 full year. If you haven’t already I would recommend finding an agent who invest in real estate and has a couple of doors or they specifically sell 2-4 unit small apartments. Hope this helps!

Joseph P. · Answer

The property isn't in the best neighborhood but doesn't appear to be in bad shape from the outside. I liked at duplex 2 weeks ago but it went fast. This deal just came up and wanted to look into it but just had some questions. I just don't like dropping 36,000

Kyle Smith · Answer

I have heard about both of those options however I’ll be honest that’s above my head right now since I’m still looking for my first deal I’ll learn those at a later date but glad to know those options are out there thanks for answering my question I really appreciate it!

John Warren · Answer

@Kyle Smith you can do a seller second carry back where the seller holds a second mortgage. This happens very, very rarely. You can also, in theory, do a wrap, subject two, etc. Most of these strategies work better for very distressed deals where the seller is highly motivated. I almost never see them in the area where I work here in Chicago because sellers can just list properties and get top dollar in almost any condition.

Kyle Smith · Answer

@John Warren I read your reply and was curious what some of the creative ways you are referring to? Are you talking about seller financing or are there others?

John Warren · Answer

@Joseph P. you can use an FHA loan on a four unit if you plan to owner occupy the property. Commercial and portfolio lenders tend to require 20-25% down, and they underwrite the deal more than you personally like a conventional loan. There are a handful of creative ways to have the seller help you put less down, but without a relationship with the seller it is unlikely that you will pull one of these creative methods off.