Gift for FHA Loan financing
Good morning everyone,
I am looking to jump into real estate investing primarily with rental properties. My future wife and I are currently renting but looking to purchase our first "property" together and are currently planning on owner-occupied multi-family unit.
Since we would be looking at our first property and owner occupying, we are looking to utilize a FHA loan to get 3.5% down payment. The kicker is - like many 20-30 year olds, we face the evils of student loans and do not have much saved up for a down payment. On a side note, we have been pre-approved over the amount of price ranges we have been targeting.
We came across a beautiful 4 unit/8bdrm townhouse (built in 2016) in a desirable part of town. We actually were looking to rent one of the units before we took our current apartment. Each of the units are renting between $900-$1000/mo and in this area it is an affordable, yet reasonable. The price tag on this property is $379k. Since we are looking to owner-occupy, we believe this would be a great opportunity to leverage 3.5% down payment to get our start into investing. Now for the bad part, we could probably come up with about half of that amount total as down payment. I know there are many creative ways to get funding so I am turning to experienced investors on BiggerPockets to see if there is a way we could swing this, or if this property is too big of a leap to start as a beginner without a large down payment. I would like honest feedback.
I know that FHA loans allow for gifts which I could most likely get from a friend/future partner, as a "handshake" and technically be without repayment listed on any sort of contract. Eventually would either gift his amount back or would gift 50% of units later on (but based on a merit agreement). Since I am new at this, I do not know the legality or technical qualifications for gifts on FHA loans.
Is the above mentioned scenario feasible? is there any other ways to get financing without much of a down payment? The other option was borrowing against 401k, but I would be hesitant to make this move until I am more experienced in real estate.
Any suggestions? ideas? Thanks in advance