House Hack Financing

4 Replies | Virginia Beach, Virginia

Happy Thursday,

I'm in the process of getting myself ready to purchase my first investment property in VB; however, I am unsure if I should go with an fha loan or a conventional loan. Coming up with 20% down on a 220k duplex is a little difficult; however, the pmi and premium that an fha loan requires could end up costing me more in the long run. I welcome any and all advice. 

I try to limit the amount of money I have to bring to the table. As long as you buy right, analyze the property as a rental, and the numbers work with the additional costs (e.g., PMI) associated with a lower downpayment, I think the FHA is the best way to go! It should supercharge your ROI potential! Happy hunting!

I agree Frankie. Limiting the amount of cash I have in the deal would be ideal. I've gone over the numbers several times; however, I'm not sure if the FHA loan requires a certain level of pmi no matter what. I'll have to look further into it.

@Vaughn Smith

@Tyree Etheridge you may want to look into a conventional loan with 5% down. If you qualify you'll still have to pay PMI, but unlike with a 401k loan the PMI falls off when you have crossed the 20-25% equity mark

Thanks for the information. I like the idea of only having to put down 5% as opposed to an fha where I could only put down 3.5%, but could never remove the pmi. I am also thinking of getting into a duplex or quad and rent it out completely. I will do whatever the numbers tell