Second Deal financing for Multi-Family

[Darian Richardson]

Evening Fellow Investor,

I recently closed on my first deal in April 2017 on a duplex in Lawrenceville, Ga that I am currently househacking. I used a FHA loan with a 3.5% down payment, from my understanding I can only have one FHA loan until the other is paid off. My question would be what suggestions are there for financing my second deal? I know there are conventional loans the require 20% down, but are there any other loans that require a lower down payment such as 5%-10%. A 20% down payment would be a bit to steep for me, especially if the next deal I am planning to do would be a 4 unit or up in the Atlanta area where the prices range from 300k to 500k. If anyone has any suggestions or links that I can research for alternate financing strategies please let me know.

[Darian Richardson]

I'm obligated to have the duplex as my primary resident for 12 months, although from my understanding the only way to verify that would be the mail continuing to be mailed to that address. 

On my search I was planning to utilize the 203K loan as well but I would suggest only dealing with a broker and agent that handled that specific type of loan before. Due to the many hands in the pot to finalize everything, what I learned was that there is a need of at least 3 different licensed  contractors, realtors, attorneys, brokers, etc. Also something to think about, the repair cost will be tacked onto the loan, which will have to be paid throughout the course of the loan whether it be 15 years or 30 years. How major is the repairs and would you be willing to repair the unit for yourself while househacking?

In regards to the terms, I received a 30 year fixed mortgage with a 4.4% interest rate, at the time I got approved I was at solid 690- 700 credit score but my credit has grown since then.

The home warranty is about $960-$1,100 annually which averages to about $83-$85 monthly, and covers just about everything in BOTH UNITS, the sweet part is my realtor fought for it to be paid at the closing by the seller, so I ended up getting the first year essentially for free. From ceilings fans, dishwashers, HVAC units, electrical outlets, and basically everything under the roof, I highly recommend it.

I hope this was helpful,

@Charles Kennedy