FHA Loan for investment?

Question

Hi everyone,

First of all thank you to anyone that reply’s as I am new to the bigger pockets podcast but I am loving it. My question is that I am wanting to buy my first real estate rental property, I am more on the side of a turn key property but I do not have the 25 percent down payment . I have closer to 10 percent. I’m just wondering what my options are. I’ve never had an fha loan but is there a way to get an investment property without the 25 percent down ? Thank you all any tips appreciated!

Account Closed · Answer

@Tony Gaultney I wonder what the law is to Air BnB a private room with an FHA...

Say you do purchase a 2-4 unit. Rent out the others and keep one for you. Would it be legal to rent out your “personal” unit as a “private room” not “entire unit”. That way on paper you are still occupying the unit just renting a room, and you could still spend most of your time at your house. Just hate to waste the one unit for a year when it could be generating income.

Michael Noto · Answer

@Tony Gaultney Here is an idea, buy a 3-unit property and rent out 2 units. Keep the 3rd as your primary for a year and just spend most of the time at your girlfriends house. Win-win. After the year is up, rent out the 3rd unit and you are all set to go. Sounds like the lower down payment is key for you given your situation right now.

Tony Gaultney · Answer

@Phil Wells

Thanks for you’re insight Phil! A grant would be even better and yes I will reach out to a lender! Thank you

Phil Wells · Answer

@Tony Gaultney talk to a local lender. Here in Spokane you can get grants from the city to cover the 3.5% down you require for an FHA loan. There might be something similar in your area too.

You can only by residential property with an FHA loan. This covers the famous duplex so often prized by Bigger Pockets enthusiasts (also includes up to 4 units).

Your first port of call should be a local lender for sure.

Good luck!!

Tony Gaultney · Answer

@Twana Rasoul

Yes that maybe a topic for us to discuss! Thank you for you’re time

Tony Gaultney · Answer

@Sam Baker

This thought crossed my mind and may be a viable option if possible. I will have to look up the laws as far as that goes but a great idea as well thank you

Tony Gaultney · Answer

@Michael Noto

Thanks for you’re response! That is a great idea and an option Forsure! I really don’t have a plan to leave the house we are currently in so this sounds like one of the best options I appreciate you’re time

Twana Rasoul · Answer

@Tony Gaultney maybe you can buy a duplex you can both move into and she can rent out her place?

Tony Gaultney · Answer

@Twana Rasoul

Thank you for the response! I was looking at a duplex and found out about house hacking. I currently live with my girlfriend and she owns her home so I didn’t want to move but I guess I could make the new place my primary residence and stay at both 🤔?

Twana Rasoul · Answer

Hi Tony,

You can purchase a 2-4 unit investment with an fha loan and move into one of the units and rent the others out.  You have to live in the property for a year but you only have to put 3.5% down.  I'd say this route would be a better investment strategy to buy your first property than buying turnkey.  with investment non owner occupying loans you are paying 20-25% down.

best of luck!

FHA Loan for investment?

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