Updated over 6 years ago on .
FHA 4 Family that allows me to live rent free
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Folsom.
Purchase price: $290,000
Cash invested: $21,000
Using an FHA loan I purchased a 4 family fully rented home in Folsom Pennsylvania. The tenants were all on month to month leases so one of them moved out at closing so I could move in. Will live in house for at least a year and probably move out and rent the whole building. Right now the 3 tenants cover the mortgage payment so I am living rent free.
What made you interested in investing in this type of deal?
Wanted to live for free and take advantage of as many units an FHA would allow me to get
How did you find this deal and how did you negotiate it?
MLS. Came close to asking price as long as seller agreed to give me a %6 sellers assist, which covered all my closing cost.
How did you finance this deal?
FHA Loan, downpayment from employer 401K
How did you add value to the deal?
When I moved in the property one tenant was well below market rates for rent and I offered him a new lease that was higher than his rent but not as high as market rate. He refused and moved out, I ended renovating his unit and advertising unit for market rent and getting a tenant within a month.
What was the outcome?
Still live at property. Wil most likely move out after a year and rent out the unit I am staying in.
Lessons learned? Challenges?
Pick management company wisely. After you pick management pay close attention to every move they make, make sure they get the green light from you to do anything. When they are finding you a tenant stay make sure you make the final decision on tenant selection.