Pompano Beach, FL · Member since 2016 · 9 posts · 2 votes
I'm looking to buy my first home by the end of this year or the beginning of next. I have good credit and some money saved up.
My question: As a beginner in real estate investing and never owning my own home, should I invest into a single family home, repair it and then rent it out or should I invest in a duplex fix it up and rent one unit out and live in the other?
Currently I'm living at home with my parents no bills just a car payment and a small school loan that I am paying off and will be done by the time I make my first purchase.
Real Estate Agent · Willoughby, OH · Member since 2014 · 560 posts · 690 votes
10y
You must live there for one year if purchasing using an owner occupied FHA. I recommend going the 2/3/4 unit route as you will only need 3.5% for the entire purchase. If you buy a single now using your one allowed (at a time) FHA 3.5% down loan, you would essentially need to come up with at least 20% down on your next purchase unless you were to refinance your first purchase into conventional and then get another FHA 3.5 down loan. This will take some extra work and cost more in the long run. You can maximize your leveraging ability and get a big head start if you go multi from the get-go.
As far as someone hurting themselves, search for 'umbrella policy' on here and you will find your answer :)
Bellefonte, PA · Member since 2016 · 5 posts · 1 vote
10y
Maybe I have something to learn here as well, but I believe 3.5% down loans are generally only available as FHA loans, and I thought FHA regulations stipulate that the person financing the home needs to live there? i.e., in the first scenario you provided, you would have to live in the home for some period of time, you can't just "repair it and rent it out," you need to live there. You can use FHA for a duplex and only live in one half, though.
Oldsmar, FL · Member since 2016 · 12 posts · 4 votes
10y
Multi-family homes are the way to go since they will bring in the most revenue for you as an investor. Matt is right when it comes to an FHA loan. You do have to live in one part and rent out the other for a period of time. What you can do is make the rent equal or more then the loan is for, so that way you can cover any costs that might come up with on the tenant end and you will live rent free. Consult a real estate attorney on how long you have to live in the home before you can rent out both places. The best case is to find a three or four unit property to maximize your earnings, but remember to keep your security deposits in a separate account from your personal account. Let me know if this helps and good hunting.
Real Estate Agent · Willoughby, OH · Member since 2014 · 560 posts · 690 votes
10y
You must live there for one year if purchasing using an owner occupied FHA. I recommend going the 2/3/4 unit route as you will only need 3.5% for the entire purchase. If you buy a single now using your one allowed (at a time) FHA 3.5% down loan, you would essentially need to come up with at least 20% down on your next purchase unless you were to refinance your first purchase into conventional and then get another FHA 3.5 down loan. This will take some extra work and cost more in the long run. You can maximize your leveraging ability and get a big head start if you go multi from the get-go.
As far as someone hurting themselves, search for 'umbrella policy' on here and you will find your answer :)
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Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com
Flipper/Rehabber · Tallahassee, FL · Member since 2014 · 461 posts · 237 votes
10y
Here is my advice, make the first purchase the best purchase. That means it will either allow you to live for free or have boat loads of equity, preferably both. This will allow you to start working on paying off debt or wealth building. Once you have your house in order the sky's the limit. Now as far as multi v single fam I don't care as long as the numbers work. It's totally up to you and your preference and comfort level. Do you want to live with other people? Me and the wife did before the kids came along and it worked out really well.