Wanting to Invest in Phoenix, only have FHA loan.

[Brian Coberly]

I just started to consider jumping into real estate rental investments however I have very little capital to start with. I make about $50K before taxes. I have enough for a 3.5% down payment on a $200K home and I'm starting now to seriously save. I have to move from my apartment in three months and I was looking to purchase purchase property with the intention of renting. It looks like market conditions in Phoenix are very good and prices seem set to rise. Now is the time if I ever want to get in. Because of my excellent credit and steady finances/job security I've been able to procure multiple loans 1% down with 2% equity from a lender on one and a pathway to purchase loan with another lender. Already I've been out looking at homes with a real estate agent in Phoenix. Can I do this? Is it possible? I've been doing my homework and studying quite a bit. I'm was thinking maybe a multifamily property with renters or possibly a single family home with a roommate the first year. What do you guys think?

[Denny Robert]

Brian, does your lender and agent have multi family experience? Jud Holmes at Nova Home Loans has done my and my friend's/client's FHA owner occupied multi-families and is familiar with the process.

A lender and agent experienced in duplex, triplex, and fourplex buildings would tell you the lender will count rents towards your income, allowing you to borrow more. $200k would make it difficult to get a decent multi in Phoenix/Scottsdale/Tempe, but with a little more you can. What areas are you looking?

If you are looking strictly at single family another interesting option is to look at homes with guest houses. These can be rented out and get you an extra $500-$1000/month depending on area, size, and condition.