I just closed on a 4-plex Purchase with an FHA loan

[Jinhee Park]

I just closed on a 4-plex purchase with an FHA loan in Tucson Arizona. After 6months of jumping through hoops of securing financing as a self-employed person, searching for the right property, getting the offer accepted, negotiating roof repairs with the seller to meet the FHA guidelines, I finally got it closed.

purchase price:  $243,000

I got the seller to pay $5000 to cover part of my closing cost.  

I got a FHA loan 30-year fixed interest rate at 4%.

The 4-plex has two 1bedroom 1bathroom units and two 2bedroom 2bathroom units.  Fair market rents are $650 for the 1/1 unit and $750 for the 2/2 unit.

Monthly PITI payment is $1634.

I’m going to occupy one of the 1/1 units.  The other three units are rented out to tenants already. 

So with the total rental income from the other three units are $750 + $750 + $650 = $2150 per month, which more than covers my PITI payments.

I get to live in this property as a primary residence for free and have some extra cash flow every month.  I’m very happy with this purchase.   

[Mark Rocha]

@Jinhee Park Awesome! Congratulations Jinhee! I too did the same thing the exact same way in Fresno, CA a year ago now and couldn't be happier with the progressed I've made with my investing career. One thing I did for myself, which I highly recommend, is pay rent for the unit I lived in to myself. You can view it as savings, cash flow, or a $650 mortgage payment, doesn't matter. As long as your savings continues to build, preparing for the next purchase and keeping you ready for any unexpected repairs. Also, this wIll give you an indication of how the property will perform should you decide to move out when you fufill the FHA requirements. Best of luck to you!