How can I get into this multi-family without selling current home

Question

A triple decker just went up for sale in my area for $510,000. In 2014, it sold for $260k.

I think it's worth A LOT less than what their asking for.

I want it, but I have NOTHING! Just about a years worth of equity from my current house.

The place is literally across the street from my house and it's the best part of the area.

My question is, HOW CAN I GET THIS PROPERTY WITH BASICALLY NOTHING!

I'm a person with a lot of creativity, but struggling to get it out and make it tangible!

Felix Torres · Answer

@Jaysen Medhurst The property looks like it was definiteness used for mixed use, but they have done a great job to make it residential.

What I want to do it either:

-Use the equity on my house (I don't have much equity, it's only been 10 months since moving in.)

-Find a loan product that will allow me to live in my current house, but purchase the other property (not sure how)

- Transfer FHA to new property and find loan to keep my current home as rental property.

My house is appraised for $240k, the 4 unit starts at 500k.

What you think?

Jaysen Medhurst · Answer

@Felix Torres, a 4-unit is not commercial, unless it's mixed-use.

Felix Torres · Answer

@Jaysen Medhurst Thank you for responding.

The house that was on my block was removed. The triplex was listed for 183% more than it was originally sold for in 2014. I believe they knew themselves, it was overvalued.

I did find another property , but it has 4 units and now considered commercial. The location is perfect for college kids. It's a 10 minute commute in total. Rent's in the area are increasing due to the college. Rent's have increased around 30% based off random apartments in the those HUGE commercial buildings.

4 units, 7 beds, good size garage and yard. My best is to find an equity partner, however I eventually want to be the sole owner so I can add start my property management portfolio and business.

Guaranteed rent considering the location. Just need to make sure we due proper due diligence when I decide to do this.

-Felix

Jaysen Medhurst · Answer

@Felix Torres, 1st of all, will this make a good rental? If so, at what price? Lastly, is that price FMV for your area. The problem with HCOL areas is that home prices and rents are not directly correlated. So, lots of properties simply won't cash flow.

What do the comps say about the FMV of the triplex?

Assuming the numbers work out, you could

• Find an equity partner. 
• Buy it with a low down payment loan, like FHA. You'd have to move out of your place and rent it out. That means your current home must pencil out as rental, which is dubious.
• Owner financing is probably off the table. That would be the only other option.