Paying 20% Down payment vs 5% (MIP of 1.5% or PMI 0.5%) on 4Plex

[Shopitha Kumar]

HI,

I am looking to buy a 4plex  and it costs about $1.57M. I am planning to live in one unit and rent out the other 3 unit. The other 3 units are rented out and rental income is $5400 per month combining the 3 units. The property tax is 1.2%. The vacancy rate is about 4% and we are planning to use a property management company that has quoted 8%.  We will be eligible for 2.25% interest rate as this will be our Primary residence. Our current rent is $3.2K and the unit that we are occupying is about 2.5K in rent (which I didnt account in the rental income). This property has a negative cash flow if it a purely investment property( -0.5%)

1) Would this a good investment considering we will be living in this property for 1-2 years ( We definitely want to move out after 2 years MAx)?

2) Is it a good idea to apply for FHA ,request for 5% down & Pay MIP of 1.5% ) instead of putting 20% down if lets say we can grow the remaining 15% down payment money at a 8% rate ?

Kindly share your thoughts !!

-Sofia