FIRST INVESTMENT

[Brooke Leach]

I am currently searching for my first investment. I am most interested in purchasing a small multifamily home and renting it out. I'm wondering what direction I should go as far as financing the home. I am expecting to make repairs as well. Is an FHA loan the best route to go?

[Alex Linden]

There are a lot of different options to choose from, especially if you are interested in living in the property.

One of the benefits of using the FHA loan is that you may also be able to use the "extension" to it, the 203k loan, which also allows you to wrap the rehab costs into the price of the loan which can be very beneficial to those starting out with a smaller amount of cash. However, the FHA loan does have the 6 month - 1 year live-in requirement for the loan.

Another possible loan to consider would be the VA loan if you qualify for it. It is similar to the FHA loan, only it is specific to Veterans/Military; In addition it allows for a 0% down loan on the property as opposed to the I believe it is currently 3.5% down on the FHA loan.

Otherwise, you can always consider a partnership (depending on your goals) or Conventional Financing. Or a combination of those as well. BP is an amazing site full of amazing people and truly endless information. 

One awesome source of financing information that I am in the process of reading is Brandon Turner's, Book on Investing in Real Estate with No & Low Money Down. The majority of the information can be found throughout BP, but it is like a very convenient handbook! 

I am sure others have a lot more information on the financing topic as I am also a newbie, just thought I would point a couple quick things out! 

Good luck!