First investment questions:4plex

[Alexander Alguire]

I am looking at a 4plex in Phoenix as an investment property with the plan to buy, update a tad and then sell 2-3 years down the road with a good chunk of added equity. This would be my first investment property EVER, and I am searching for advice from those of you who have invested in MF properties. I currently do not have lots of money but the agent I am working with said it should qualify for a 203k loan. What financial barriers do you see coming my way? Starting money past a down payment is what I am mostly concerned about. Also, the seller wants a 10% down, I would like to get that down to 3%, what strategies would you recommend in helping me do so??? If any of this seems wrong, please let me know, I am extremely new to this but VERY eager to learn.

[Denny Robert]

@Alexander Alguire, with a 203k loan you have a to use a licensed contractor for all the work. He has to submit a detailed bid laying out all of the work you want him to do. You will either need to give notice to the current tenants if you want to remodel their units, or not use 203k for the interiors of those units. Also, with a 203k loan you have to be able to justify that after repair value with comps, so make sure your agent can product those. If you're going to stick $30k into the remodel, the mortgage company will want to justify it.

I personally think 203k is more strategic on a single family home, but if you can make it work to your advantage that would be awesome.

Also FHA will require you to have enough money for down payment and a few months of mortgage payments in the bank for repairs and vacancy.