First time House Hacking - FHA LOAN DUPLEX

[Dylan Smith]

Hey BiggerPockets, question!

Do you recommend purchasing a multi family property with an FHA loan. To keep it short, I'll be living with my girlfriend - rent is $1000/month; $500 each.

The goal would be to house hack" a duplex with a FHA LOAN (3.5-5% down). Rehab side A - Rent side B . Once rehab is completed - move tenant to side A - Rehab side B & after 6/8/12 months rent side B. Rinse and repeat. Possibly do a triplex, then quadplex. My mortgage loan officer says he only requires 5% down for 2-4 units

[Michael Dumler]

@Dylan Smith this is one of the biggest investment strategies that BiggerPockets and investors alike advocate to newbies. However, easier said then done. With the current nature of today's market, most 2-4 unit properties (Atlanta, GA market specifically) are bought by all cash buyers that are willing to go way over asking. FHA insured loans have regulated lending guidelines, meaning the property has to meet certain requirements before underwriting is applicable. Usaully FHA lending terms are more favorable when the property is move in ready. Also, FHA requires the owner to occupy the property for the first year. Therefore, if one of the units is already tenant occupied and the other is in the process of rehab, then you're technically committing mortgage fraud. With that said, investors use this strategy all the time. Hope this helps!