Fourplex Purchase / First Time Home Buyer

[Abigail Santamaria]

I am a first time home buyer and looking into purchasing a fourplex in which, I will reside in one of the units and rent out the other 3. Since it is my first time, I have many questions I was hoping the biggerpockets forum would be able to  help me out with. 

Before purchasing what type of research should I do on the property and what information should I gather? What things should be considered before the purchase? How do I make a well informed decision on how much rent should be? Is there a certain website(s) I can utilize to research all the information above? Who should I contact regarding a lease agreement? Overall how do I determine if the investment is worth it or if the property is over priced?

I apologize for the many questions. Since this is my first time; I want to make sure I do my due diligence. Any help would be greatly appreciated.

Thank you in advance.

[Sasha Mohammed]

i would start by determining how much down payment you can afford. fannie/ freddie are going to require significantly larger down payments than FHA; however, FHA has an added guideline on 3 and 4 unit properties which require the property to completely cash-flow-positive off the rental units alone with no contribution from you. This is called the "self sustainability" guideline, or test, and it should not be overlooked on multi-family properties. Im not sure where you're looking to buy in, but where i am, in CA, properties which will pass this test are few and far between, making FHA minimum-down also not an option.

Once you've determined how much down you can swing, talk to a loan officer about how much house you can buy. Most multi-units will have to be run on a property-by-property basis, since some tenants will be newer with higher rents, and some will have been grandfathered in at low rents for seemingly forever. Rent control is another added factor to consider, depending on where you are looking. 

if you have the patience, this strategy is amazing! ive seen many get into RE investing with this as a jumping-off point. It will take a bit of grit to find MF that pencil's out, but well worth it. 

one more piece of advice - work with a realtor who is familiar with house hacking/ income producing properties. not any joe-blow realtor is going to be a good fit here. Someone like @Jeffrey Isenberg if you're in the LA area will run proforma's to determine the right-now numbers along with the future numbers. 

Lastly, keep doing what you're doing: asking questions, reading on forums, talking to people. there is no shortage of knowledge or experience on BP! 

GL!