***FHA 203k loan for first investment property?

[Ryan McElroy]

Hi, i am a 23 year old graduating in May 2015. I plan to relocate and start/build my real estate investing portfolio. I have an end goal of 2-3, 75 unit apartments complexes brining in substantial cash flow each month. 

After doing tons of research (i'm not done and wont stop anytime soon), I feel that using the FHA 203K loan to purchase a fourplex would be the best way to start this adventure. I would live in one of the units, rent out the others and live for "free" while my properties mortgage gets paid down each month. I will continue to purchase more properties over the years, using the equity/cashflow/inflation/refinancing to trade up and purchase larger apartment complexes, eventually retiring at an early age!

**My question is....would the FHA 203K loan be the best way to start my investing career give this mini business plan? I will be working full time as a Registered Nurse (3, 12 hour shifts a week, 4 days off), and dont have much money starting out since i'm literally starting my life from scratch haha. I feel that having this first fourplex would be a great foundation to show me the ropes, while at the same time living for free and focusing on the bigger picture!

Any advice would be great, Thanks!

Ryan

[David Harris]

I used 203K in a similar fashion.  It's definitely a great product when used effectively.

Some things I would recommend:

• as @Kyle Gregg said if your bank has solid contractors the recommend, start there when looking for a contractor.  One of my biggest issues was finding a contractor that was willing to work with the 203K method of payment.  I had a pretty bad experience with my contractor, but he wasn't recommended by the bank.
• Make sure you have a good 203K consultant.  My bank did recommend my 203K consultant, he was definitely a stickler, but he caught a lot of shoddy work that my contractor did, and made him redo it.  In hindsight, I wish I would have reached out to my 203K consultant a little more during my contractor search.
• Do your best to have a clear cut plan on what you want done, if substantial work is needed, you will most likely use a GC, you still need to be active in the planning stages and you may have to stay on top of your GC as well to make sure things are done exactly how you like them.

Good Luck! It's definitely a great way to get started.