House Hacking Advice

[Ellis Thurman Jr]

Hi,

I'm looking to purchase a multi-unit town home with and FHA loan. I'm also a new investor. I been marketing for wholesale deals but it's slow motion out in Baltimore and high competitive.

I was never interested in whole but it seems to be a necessity starting out with no capital for what I really want to do (rehabbing, commercial, multifamily). But I do need to move and figure a purchase of a multi family 2 unit home, I live in one unit and have a tenant would be a great start to a real estate portfolio.

The question I have is I've networked with am agent and I know he'll ask for proof of funds. Should I actually start the process of securing the FHA loan which should give me the proof of funds. I'm not exactly how to start this process since I am a newbie investor.

[Patti Robertson]

Yes, the first step is to connect to a local lender - preferably one who does up front underwriting - and find out how much you will qualify for and how much down payment you will need.  That will tell you what you can shop for. You are going to have to have a pre-approval letter to submit an offer, and you want to narrow your search for what you can afford.

This is my favorite way to get started in investing! Remember, your FHA loan can be used for 1-4 units. Ask the lender if you were to purchase something that already had established tenants in it, could you use the existing leases as income to qualify for the loan. Off to keep the existing management company in place if underwriting wants to see experience. How could would it be to find a 4 plex that literally pays you to live there!