All Forum Posts by: Sangwon L.

FHA vs Conventional is definitely something to look at. FHA loans on multifamily will likely have the self-sufficiency test for 3-4 unit properties and with current interest rates virtually every property is unlikely to pencil.

If you can do conventional you do not have this test (but talk to a lender to be sure and get your specific situation).

Best of luck to you!

I did not know that triplex/fourplex would require self-sufficiency test.

So, if I am planning to use FHA loan to buy multi-family (2-4units), I can only afford duplex at this moment because of high interest rate, right?

triplex or fourplex will not satisfy self-sufficiency test as FHA requires that the property’s rental income covers 100% or more of the mortgage payment.

Thank you for the advice!!

Hey I'm located just under an hour south of Sac but I currently have a few listings in the area, full disclosure I'm not a lender, but from what I understand you could still qualify for 3-4 units even with Interest rates at high 6's - low 7's. Of course they'll look at conventional ways to qualify you and your future spouse, but they may even look at the future rental income of the other units (if they're vacant) or current income they produce.

Thanks!! I will keep that in mind!

0 Votes

Quote from @Daniel Hyman:

Aside from speaking with local investors, agents, and lenders in Sacramento, I would recommend speaking with local property managers. They are usually a wealth of information about market conditions.

I have not thought about speaking with local property managers. Thank you for the advice!

0 Votes

Sacramento, California

Quote from @Noah Laker:

Hey Sangwon, I'm a local broker and investor in sacramento, and I manage 100+ investment properties, mostly Airbnbs.

Multifamily house hacking is a CLASSIC strategy and very rewarding. It's so simple, anyone can pull it off, and many of my clients are first time investors employing the exact same strategy.

I think you already have it pretty much figured out, but I might suggest incorporating some kind of creative housing in the mix to increase revenue, like STR/MTR or renting by the bedroom. These are much needed products with more active management and the revenue shows.

SO basically, buy a 2-4 unit, live in one unit, and rent the others creatively. This is by far the best strategy for a new investor to get in the game IMO. I'll shoot you a DM!

Thank you very much for sharing the different ways of increase revenue. I did not think about renting the other unit as MTR/STR. I see a lot of duplex listings, but I couldn't find triplex or fourplex! I will message you!

0 Votes

Sacramento, California

Quote from @Jake Andronico:

@Sangwon L.

Congrats!! I'm just over the hill in Reno, NV and have successfully house hacked twice. Completely changed my life.

If you can do conventional you do not have this test (but talk to a lender to be sure and get your specific situation).

Best of luck to you!

1 Vote

Quote from @Gabe R. Gonzalez:

My only comment would be that C class properties are not worth the discount you’d get at acquisition. Tenants are higher maintenance as are the properties. Try your dambdest to get a B or higher unit/neighborhood.

Thank you for your advice! I will keep that in mind. I will try to look for Class B or higher!

0 Votes

Hello!

This is my very first post on BiggerPockets. I have been reading the forums without an account, and I think it’s now time to step up and ask for some advice from experts!

My fiancé and I are planning to move to Sacramento from the Bay Area. This move will be purely for our first investment in real estate. We have been reading The Multifamily Millionaire by Brandon Turner and are very 100% sure about buying a multifamily property as our first investment. We are looking to buy a duplex (possibly a triplex or fourplex, if feasible) using an FHA loan. We plan to live in one unit and rent out the others. Hopefully, this first investment will launch our journey in real estate.

Here are some criteria we have in mind:

Not in downtown Sacramento
Class C+ or B location, since we will be living in one unit (we just want a safe location)
Units with shared walls, not ceilings
Separately metered
Fairly renovated or well-maintained (not a fixer-upper, but if one unit is renovated and the others need some work, we would love the experience of fixing and renovating)

Can you think of any other factors we should consider? We are very flexible and would highly appreciate any suggestions or recommendations you might have!

I would love to speak with local investors, agents, and lenders in Sacramento. Please let me know if you are open to discussing!

Thank you for all your support!

1 Vote

Hello!

This is my very first post on BiggerPockets. I have been reading the forums without an account, and I think it’s now time to step up and ask for some advice from experts!

Here are some criteria we have in mind:

Not in downtown Sacramento
Class C+ or B location, since we will be living in one unit (we just want a safe location)
Units with shared walls, not ceilings
Separately metered
Fairly renovated or well-maintained (not a fixer-upper, but if one unit is renovated and the others need some work, we would love the experience of fixing and renovating)

Can you think of any other factors we should consider? We are very flexible and would highly appreciate any suggestions or recommendations you might have!

I would love to speak with local investors, agents, and lenders in Sacramento. Please let me know if you are open to discussing!

Thank you for all your support!

5 Votes

Sacramento, California

All Forum Posts by: Sangwon L.

Sangwon L. has started 2 posts and replied 7 times.

Post: 1st investment. Moving to Sacramento. Buying duplex and do househacking. Need advice!

Post: 1st investment. Moving to Sacramento. Buying duplex and do househacking. need advice!

Post: 1st investment. Moving to Sacramento. Buying duplex and do househacking. need advice!

Post: 1st investment. Moving to Sacramento. Buying duplex and do househacking. Need advice!

Post: 1st investment. Moving to Sacramento. Buying duplex and do househacking. Need advice!

Post: 1st investment. Moving to Sacramento. Buying duplex and do househacking. Need advice!

Post: 1st investment. Moving to Sacramento. Buying duplex and do househacking. need advice!