All Forum Posts by: Eddie Cottingham

@Tony Marcelle You are right. Fundamentally that is how it works but you always have to have backup plans. Also this is less of an issue with 4 units which is why I made sure to reference a duplex in my answer.

When I buy my duplex, I’ll be able to afford the mortgage even when I don’t have a tenant in place. So you either need to have reserves or make enough money to cover in the extreme case that you are not receiving rent.

For one, if you are depending solely on your tenants to pay the mortgage, you may have an issue. Especially if this is a duplex because you will at some point have vacancy.

Also note that what you charge your tenant for rent is dictated by market rates. They pay you, then you pay whatever you want. If it covers the mortgage and your utilities, great. But you can't base what you charge them on whether or not your utilities are covered.

I will be house hacking very soon and even though my tenant will be paying most or all of the mortgage possibly, I still base the financing on whether or not I can afford the payment out of pocket.

@Diana Dorantes I agree. I actually have been lurking for some time, doing a vast amount of reading and still seems there are many voids in my knowledge to fill. Mainly ones that are situational and that will essentially only be learned through doing actual deals. Because of this, I plan to house hack for my first duplex or triplex and grow from there.

That being said, as far as multifamily on the mls, I never see anything worth the time in the Birmingham, AL area. I figure most are simply acquired off market.

Thanks for all the answers so far people.

@Logan Allec Interesting to know. So it may just come down to the appraisal then I would assume and who does it. My lender got back to me and said we could theoretically do this so we just need to see how the numbers come back on the property.

@Jason Cory I have read instances where different appraisers do different things. I will certainly take note of your experience with this. But seems like it will just depend on how they wish to determine the value.

@Brendon Foster I currently have a realtor helping me with it. If we can't make progress, I will reach out to you regarding your contacts. Thanks!

@Brendon Foster : Thanks. I was contacted yesterday and they told me we could indeed proceed with the loan process. I am definitely worried about your comment about finding other similar properties as a search of recently sold and for sale properties didn't really include any. Assuming they can't find any, I am guessing there wouldn't be a way to assign value to the property?

Hello BP! I have hidden in the shadows a good while doing much reading and familiarizing myself with various aspects of real estate investing.

Now that I am looking at buying my first rental property, the more unique questions are starting to come so now I must engage a little further.

I am currently looking at a property that has 2 duplexes on it. All under the same address. Because there are 2 separate buildings on this property, I didn't know how FHA would apply to this situation. Would financing still happen in a similar fashion as if I were buying a fourplex? Thanks!