FHA Loan - Cash flow?

[Conrad Legé]

Hello BP,

I am in the process of searching for my first multi-family property and have been working with a FHA 203k lender. We had a conversation today and to keep it long story short she stated that I shouldn't expect a property to cash flow when running the numbers for an FHA loan. She pretty much said said unless you are putting 25% down the best you can ask for is to "break even." Is this accurate?

[Brent Coombs]

@Conrad Legé, the point she was getting at is: In areas where people want to live, the cash flow return is minimal even for for 25% deposit investors who rent the whole property out, and thus, much harder for 3.5% deposit owner-occupiers, who have to live there too!

It's your job to prove her wrong. (Or, put up with paying some mortgage yourself!) 

But if your costs to own can be less than rent, what's your complaint? Good luck...