Financing Tips & Plans

[Madden Telles]

I am a 16 year old planning to form an LLC under my parents name in order to qualify for business credit to cover the down payment on my first investment property I will also pair the business credit I am able to qualify for with cash and refinance to pay off the down payment when the interest starts to kick in but I am wondering if when applying for a FHA loan on an investment property if they require income to qualify or if they will accept it because I will be renting and covering the mortgage with the rent and how that all works when qualifying and if this is even possible. I am also wondering if there are any tips you could give me as a 16 year old who has been consistently learning about RE and is eager to start.

[Stephanie Medellin]

@Madden Telles FHA loans are only for purchasing a home to live in, so you wouldn't be able to use this type of loan to purchase an investment property, and you won't be able to buy it under an LLC. You could buy a 2-4 unit property and live in one of the units. If that's what you had in mind as an investment property, that could work.

You also won't be able to borrow your down payment.  It could be a gift from family, or money that you have saved.

I would suggest getting a part time job now, then transitioning to full time once you're done with school so you have work history to qualify for a loan.  Save as much money as you can from working to use for a down payment.  You'll also need to start building a credit history.  As mentioned above, you'll also need to be old enough to legally sign loan documents.

It's great you're learning all of this now, so you can work towards your goal!