How To Buy Your First Home & Investment Property Simultaneously

[Jeremy Cohen]

Hey, BP

Hope all is well!

I am fairly new to the RE world & I'm looking to purchase my first Buy & Hold / Investment Property simultaneously while also building my own startup using a similar method for commercial space I would love to run a few additional questions by you when you have the opportunity.

I read your post on how to buy your first investment property & home simultaneously.

According to FHA site: "To prevent circumvention of the restrictions on making FHA-insured mortgages to investors, FHA generally will not insure more than one principal residence mortgage for any borrower."

Additionally, "FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance."

To further clarify this issue, FHA loan rules also add, "Any person individually or jointly owning a home covered by an FHA- insured mortgage in which ownership is maintained may not purchase another principal residence with FHA insurance, except in certain situations as described in HUD 4155.1 4.B.2.d."

Those types of circumstances should be discussed with an FHA representative and/or your loan officer. Check with FHA if you have circumstances that might be considered eligible for an exception to these FHA loan rules.

It's important to note that borrowers who do not adhere to the FHA occupancy rules could be considered to be acting in "bad faith" on their FHA mortgage loans.

Contact your loan officer or the FHA directly to learn what the consequences of acting in bad faith on an FHA loan may be in your state.

Read more: http://www.fha.com/fha_article?id=371

After doing additional research I came across this strategy: intellibiz.com/doubleescrow.html.

This seems like it could be the most efficient workaround. I could do a master lease with an option to buy at a later time.

My primary concern is the restrictions on obtaining another owner occupied home in another city.

Does this strategy you conceived provide that option?

Additionally, will I be approved for an FHA loan without established credit?

Any insight you could provide would be greatly appreciated.

I'd be obliged if you could walk me through this step by step process.

Please let me know your thoughts.

You're the best.

Talk to you soon!