Looking For Multi-Family Investment Agent

[Kristian Orphe]

Hello everyone.

I’m looking for an investment Agent who can help me live my dream of living minimum to rent-free.

My goal is to purchase a Triplex or 4plex in the Los Angeles or Inglewood area live in 1 unit and rent out the other 3. I am hoping with the high rents in the area I can live rent free or under $1000 a month.

Challenges: the only challenge I’m having is down payment/closing costs as I do not have much saved in looking to take advantage of a down payment assistance program. Other than that I make decent income (approx. 110k/yr) and currently live with family rent free.

Knowledge: I do have an active real estate license and although I do not work under any broker, I understand the ins and outs of property management. Including landlord obligations, leasing and vacancies. I also know a bit of cosmetic construction techniques like sink, drywall, cabinet installations end can even put together a small team if needed.

main question: Does anyone know a real estate agent who can help me find a move in ready house in LA with minimal repares(preferably none) where the rest of the units can fund the mortgage. Or should I leave this dream alone? Any tips/advice help as well!

thank you

[Rick Albert]

Hey Kristian,

I am a Realtor who is on his second house hack here in Los Angeles. I'm a case study in the House Hacking Strategy. I also manage a Facebook Group with roughly 1300 landlords, mostly here in So Cal. I also own properties in three other states.

Unfortunately what you are looking for is far from a needle in a haystack. There are many 3-4 unit properties out there for sale but most are tenant occupied and most are paying below market rents. The numbers won't work. The second hurdle is if you do an FHA loan with 3.5% down, then there is a self sufficiency test, which basically means the lender takes 75% of the total rents (including what your unit would rent for) and it needs to cover the PITI (payments, interest, taxes, and insurance). The numbers don't work here. If you think about it, if the numbers work at 3.5% down, then why wouldn't an investor putting 20%-30% down buy it? There is the 5% down option that doesn't require a self sufficiency test, but the numbers still wouldn't be where you want them.

If you are looking at a house with an ADU, those are starting at around $900K and go up from there unless you are in C or lower class neighborhoods.

You could look into the FHA 203(k) loan for construction, but you run into the same concerns. It is the loan program that I did on my second house hack. Now if I wanted to I could live for free with major sacrifice (roommates, etc.) but that took time with appreciation and I had refinanced. I've owned it for 5 years now.

I'm not trying to be a negative person, I'm trying to be realistic. There may be some opportunities out there where you have to get extra creative, like creating extra rooms, etc. For example maybe buying in areas like Pacoima where having multiple rooms is common. I would just hate for you to go down this route with an agent who claims it can be done just for you to be in a bad spot.

I'm happy to talk to you more about it.