I am 30 yrs old; have no debt; and have been saving to purchase a turnkey four-plex in Houston. The plan was to put 3.5% down with a first-time home buyer FHA loan. I would then live in one unit myself and rent out the others--two as long term rentals, one as an AirBnB (for starters). After fulfilling my year of living on the property (FHA loan stipulation, right?), I would probably move out and manage from afar.
Sadly, Houston four-plexes have DOUBLED in price in the last year! (Most are running around $900k now.) Talk about deflating. It has me wondering if there are other, better cities ripe with four-plex investment opportunities. Thoughts? Advice? Where would you go/what would you do if you were in my shoes?
Flipper · Friendswood, TX · Member since 2017 · 401 posts · 368 votes
6y
Welcome- Keep looking and don't go to "wholesellers" or random agents to find your 4plex. Drive around the area's you want to live/own and find one that isn't for sale and maybe needs a bit of work. You will find one way under 900k.
Thanks, @Account Closed Do you literally just walk up to the front door and knock/ask if they want to sell? I feel like a lot of 4-plexes have renters in them. Is there a good way to find out who owns the building/contact them? (As I mentioned, total newbie.) My hope was really to find a turnkey building for my first property... but yeah, in this market might have to find something that needs work.
Flipper · Friendswood, TX · Member since 2017 · 401 posts · 368 votes
6y
Rarely do I just walk up to that kind of property- Tax rolls are public usually. Harris County is HCAD and you can enter the address and get the owners info- then skip trace the owners for a phone number. Also you can find their mailing address usually on the tax rolls, so you can mail them an offer.
I am 30 yrs old; have no debt; and have been saving to purchase a turnkey four-plex in Houston. The plan was to put 3.5% down with a first-time home buyer FHA loan. I would then live in one unit myself and rent out the others--two as long term rentals, one as an AirBnB (for starters). After fulfilling my year of living on the property (FHA loan stipulation, right?), I would probably move out and manage from afar.
Sadly, Houston four-plexes have DOUBLED in price in the last year! (Most are running around $900k now.) Talk about deflating. It has me wondering if there are other, better cities ripe with four-plex investment opportunities. Thoughts? Advice? Where would you go/what would you do if you were in my shoes?
Thank you!
RT
Welcome aboard. What about an FHA financed single family or duplex? No reason you should pay your landlord's mortgage when you can pay your own.
Real Estate Broker · Forney, TX · Member since 2019 · 1k+ posts · 399 votes
6y
@Rachel Thompson Welcome to BiggerPockets! Truly nice to meet you. Sounds like you are off to a good start. Maybe rethink the turn key strategy. Think of use a FHA 203 loan. Basically, same concept except you have renovation cost roll into loan. Just heard podcast on it.
Thanks,@James Wise. I have been considering that at this point. I suppose I am bummed because I felt a 4-plex would be the "biggest bang for my buck". Four units is the most you can get before you are a "commercial" property (5 or above). And my first-time home buyer 3.5% downpayment FHA loan is a once in a lifetime opportunity... since I will only be a first time home buyer only once. It makes sense to me to take advantage of that 3.5% downpayment on a more expensive property, you know?
@Anthoney Hanks, thank you! Would you mind sending me a link to the podcast? I'll look into that.
Thanks,@James Wise. I have been considering that at this point. I suppose I am bummed because I felt a 4-plex would be the "biggest bang for my buck". Four units is the most you can get before you are a "commercial" property (5 or above). And my first-time home buyer 3.5% downpayment FHA loan is a once in a lifetime opportunity... since I will only be a first time home buyer only once. It makes sense to me to take advantage of that 3.5% downpayment on a more expensive property, you know?
@Anthoney Hanks, thank you! Would you mind sending me a link to the podcast? I'll look into that.
Actually I've got some good news for you. As far as lenders are concerned you can be a 1st time home buyer more than once. I believe anyone who hasn't owned or purchased a home for the last 5 years is considered a 1st time home buyer. On top of that there are 5% down conventional loans. So you can start with your FHA, live there for a couple years while you save up some money then move onto a Fourplex when you've got enough money to cover the down payment.
@James Wise, ah, interesting. Would it hurt me if I put 20% down on a single family home and THEN tried to go for a lower downpayment on a multifamily? (Do lenders do that?) I have the cash for a 20% down on a reasonable single family investment property, with cash to spare for remodeling/flipping if I wanted.
@James Wise, ah, interesting. Would it hurt me if I put 20% down on a single family home and THEN tried to go for a lower downpayment on a multifamily? (Do lenders do that?) I have the cash for a 20% down on a reasonable single family investment property, with cash to spare for remodeling/flipping if I wanted.
My personal belief on investing is you need to take care of the roof over your hear 1st. So personally no I would not recommend buying a rental property at 20% down before I bought the property I was living in. Goes back to pay your mortgage, not your landlord's.