First 4-Plex Questions

[Jordan Christensen]

Hey everyone.

When buying a 4-plex, or any investment property for that matter, what is the best way to "own" it for tax advantages/purposes? Should it be an LLC? Or perhaps another business account? Maybe a trust?

Also - what about financing? We're thinking to do an FHA loan, and owner-occupy, for 3.5% down to conserve precious capital. At some point, we're not going to want to keep living in the place, so are there any specifics on how long you have to live in it?

Anyway, not sure what’s best. We’re likely going to be buying and holding long-term, if that helps at all.

Thanks in advance.

[Josh Stack]

Hey @Jordan Christensen,

To get the best advice on how you should own your four plex, you should probably consult with a local attorney and CPA.  That said, most folks here will hold their properties in LLCs for the asset protection benefits that the structure provides.

Here is an article that explains the benefits of the LLC structure - https://www.landlordology.com/landlord-rental-llc-... and another https://www.legalzoom.com/articles/forming-an-llc-...

As for the house hacking you are considering, if you go with an FHA style loan you'lll have to live in the property for a while. You'll need to check the specifics requirements of the loan type you are looking at but I believe you'll need to live there a year. See more info here - can-rent-fha-loan-3231.html

And some articles on house hacking you might find useful - https://www.coachcarson.com/house-hacking-guide/;  https://medium.com/@benmizes/house-hacking-the-bes...

Good luck!