First time homebuyer

[Huy Duc Tran]

Hello BP community,

I have received an inheritance of $200K and saved another $100K, so I plan to buy a duplex after being a renter for 5 years. I plan to make 20% down payment and my current income is $60k/year with no debt.

I was wondering if I am gonna rent out one unit and occupy the other unit, would I be able to add the predicted rental income from the subject property into DTI to qualify for Fannie Mae's loan given no landlord's experience and never owning a home?

Is there any better financing options for my situation?  

Note: I live in Orange County and look for purchasing in Los Angeles and Orange County.

Thank you,

[Nathan Grabau]

You should be able to use 75% of the income from the second unit to offset your mortgage payment's impact on your DTI. I would consider trying to make the 200k go further and buying a 3 or 4 unit building with a lower down payment. You could also put less down on your first property and hold more cash, which reduces your risk and allows you the option of taking the cash and redeploying it on a future property. Either way, you are absolutely doing the right thing and thinking the right way! Congrats on being an investor soon!