multifamily financing for first investment property

[David Garcia]

Hello and good afternoon BP, I am looking at purchasing a multifamily(2-4) for my first investment in real estate. I hope to purchase one by the end of this year as a long term hold rental unit. I am unsure about what type of loan I should lean towards. I hear some say FHA others the DSCR, what I am wondering is what are the pros and cons of each and why chose one over the other? Also, what lenders are good to work with for either type of loan? Thanks in advance, and much appreciated.

[Nick Velez]

@David Garcia

Owner occupied versus not is going to be the biggest variable as everyone else pointed out. If you are not going to occupy the property, the question then becomes do you go with a conforming loan or DSCR. If you can qualify conventionally, there is no reason to go DSCR unless vesting in a LLC at close is worth a higher rate to you. My guess is that if you are asking about using FHA or DSCR, you are likely not in an ideal position to use a DSCR loan yet.

I would recommend that you get in touch with a local realtor and explain your goals to them. Purchasing a multifamily property in which you intend to live in is likely going to be a different set of criteria versus one that is purely intended for cash flow. If you are in the greater Tampa area, I am sure @Josh Green would be glad to help advise.

Best of luck!