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Updated 14 days ago, 11/27/2024
MF Investing 2nd property
Hey BP. I'm looking to get my next investment property next year . My strategy is house hacking /buy and hold. I recently got my gf into the idea of investing and she agrees on finding a 4plex or 3unit . The only issue is her credit but mines is very good I have a 750 so I was going to co sign so she can get approved so my question is would the buying power be low or would it fall under me ? We plan on using FHA and hopefully there will be some first time buyer grants out there next year . The only way ill get a 4plex is if we live rent free that's my goal moving forward for the next investment. pt 2 How did everyone else get their second property ?
@Jerell Edmonds - Would you girlfriend be buying the multi or you? Sounds like she would be buying in her name, but you would co-sign? I bought a multifamily property that was undervalued, so working on renovations and improvements now. My goal would be to get a new loan early next year and pull out some of the cash in order to go find my next multiunit. Good Luck!
With the high housing market in the past few years, house-hacking and living "rent free" is very tough almost everywhere in the country, especially if you are planning on putting <20% down (higher mortgage payments + PMI). FHA is only really the better option for poor credit - otherwise a 5% down conventional loan is cheaper and less stringent.
Quote from @Greg Kasmer:
@Jerell Edmonds - Would you girlfriend be buying the multi or you? Sounds like she would be buying in her name, but you would co-sign? I bought a multifamily property that was undervalued, so working on renovations and improvements now. My goal would be to get a new loan early next year and pull out some of the cash in order to go find my next multiunit. Good Luck!
Yes in her name but i would just co sign it cause my credit is better . She would be first time buyer so hopefully there will be a grant available at that time . And thank you for the advice hope your MF is moving good !
Quote from @Robert Rixer:
With the high housing market in the past few years, house-hacking and living "rent free" is very tough almost everywhere in the country, especially if you are planning on putting <20% down (higher mortgage payments + PMI). FHA is only really the better option for poor credit - otherwise a 5% down conventional loan is cheaper and less stringent.
So true I mean rent free would be #1 goal but I can make do with half my living cut down . I might lean towards the 5% conventional at this point
@Jerell Edmonds,
Great plan with house hacking for a 4-plex! If you co-sign, the loan will consider both your incomes but also both credit scores, so her credit could impact the terms or buying power. With your 750 score, you should still get favorable FHA terms, but talk to lenders about how her score might affect the overall approval. FHA also allows some flexibility with grants and assistance programs, which could help with closing costs or down payment. Starting rent-free is a smart move—it'll maximize cash flow but high purchase price and a low down payment make it challenging. Lov the thought process and that'll make you a very good investor!
FHA loans offer a way to maximize cash flow by financing up to a 4-unit property with a lower down payment. These loans are geared towards those with lower credit scores, allowing them to live rent-free and cover mortgage, insurance, taxes, and maintenance costs. Buy, Rehab, Rent, Refinance, Repeat method to pull equity from their first property and use it as a down payment on the next. Building up cash flow from your first property can also be beneficial.
Good luck!
- Wale Lawal
- [email protected]
- (832) 776-9582
- Podcast Guest on Show #469
Quote from @Trevor Finn:
@Jerell Edmonds,
Great plan with house hacking for a 4-plex! If you co-sign, the loan will consider both your incomes but also both credit scores, so her credit could impact the terms or buying power. With your 750 score, you should still get favorable FHA terms, but talk to lenders about how her score might affect the overall approval. FHA also allows some flexibility with grants and assistance programs, which could help with closing costs or down payment. Starting rent-free is a smart move—it'll maximize cash flow but high purchase price and a low down payment make it challenging. Lov the thought process and that'll make you a very good investor!
I recently just added her to my credit so she can get a little boost in her score to help more with the process and yes with the low down payment I don't expect to live rent free but one can dream for now all I care about is owning the property cashflow will come later. Thank you for your kind words I appreciate that.
Quote from @Wale Lawal:
FHA loans offer a way to maximize cash flow by financing up to a 4-unit property with a lower down payment. These loans are geared towards those with lower credit scores, allowing them to live rent-free and cover mortgage, insurance, taxes, and maintenance costs. Buy, Rehab, Rent, Refinance, Repeat method to pull equity from their first property and use it as a down payment on the next. Building up cash flow from your first property can also be beneficial.
Good luck!
I hope I can find a 4unit they're tough to come by in my area and if they do pop up they need a significant amount of work . Right now I wouldn't mind to scale with duplex . Its a slow grind since I don't have partners so building each brick at a time is what I'm willing to do .
Quote from @Jerell Edmonds:
Quote from @Trevor Finn:
@Jerell Edmonds,
Great plan with house hacking for a 4-plex! If you co-sign, the loan will consider both your incomes but also both credit scores, so her credit could impact the terms or buying power. With your 750 score, you should still get favorable FHA terms, but talk to lenders about how her score might affect the overall approval. FHA also allows some flexibility with grants and assistance programs, which could help with closing costs or down payment. Starting rent-free is a smart move—it'll maximize cash flow but high purchase price and a low down payment make it challenging. Lov the thought process and that'll make you a very good investor!
I recently just added her to my credit so she can get a little boost in her score to help more with the process and yes with the low down payment I don't expect to live rent free but one can dream for now all I care about is owning the property cashflow will come later. Thank you for your kind words I appreciate that.
You're welcome, Jerell! Much success 🙏🏾