How to Buy a Multifamily Rental Property with 3.5% Down

[@jonathangamble]

you need more videos on real estate risks, how to save retained earnings, where refinancing can be dangerous (with numbers and detail), and how to grow the right way... in fact, it should be a series

[@ritamc90]

I would love that too!

[@Touchatt]

I’m a Gator. I do short term transactional funding for EMD, gap and double closing funding so you can get more deals under contract. I can also connect isn’t PMLs and HMLs.

[@jonathanmcintosh1969]

@@Touchatthi how do I contact you?

[@MicahWotring1]

Exactly what I needed!!! I've watched over 10 hours of FHA videos and this one explained things most of the gurus skipped over. Bigger Pockets is the BEST. Thanks guys!

[@chriscovarrubias213]

This video helped me a TON! Currently in the process of buying a multifamily on a FHA loan and this info was GOLD! Thank you guys 💪

[@legiterneyy]

Hey congrats on buying your multifamily home, I’m currently in the process of buying one myself (4 Unit) (1.2m) multifamily, thinking of using a FHA loan for this. Any suggestions or ways to get approved with what you went through already on your process?

[@thevaynenetwork2575]

Bank of America offers 5 percent down for a duplex convention option

[@KrystalLatrese]

Thank you for sharing this

[@idkmybffjill9682]

Seriously thank you, only reason I clicked on the video

[@roderickhorton7845]

Today I actually learned something very important.

[@tacrewgirl]

Great info. I didn't know about the self sufficiency rule or having to move at least 100 miles from current FHA residency to use it again. But like you said you could restructure your loan as a conventional and then use your FHA again if moving less than 100 miles between homes.

[@DanKohan]

I totally get the idea of using FHA loans to buy apartments and rent them out. The cool part is that you only need to put down 3.5% of the property's cost, which is great for starting. Great video!!

[@vevasika]

My only thing is though your monthly payment will be pretty high if you put so little down plus the PMI as they mention and then the unknown of property taxes and it’s increases…so you’d really have to make sure your rent will be able to cover that

[@ediemoll]

How is it that I learn something EVERY TIME I listen to you guys?!?

[@ATFstein]

Boom first! Love this channel I live in San Jose and I’m tired of making printed circuit boards for a company that won’t give me a raise while they spend 10 million dollars upgrading their equipment in the last 6 months.

[@karlfriebel744]

Very informative episode. Please breakdown DSCR loan for small multi family.

[@patelbv]

I keep saying it, but we love mortgage Mondays! And like every episode, so much of that is relatable. I was a buyer in late 2015 when the lending laws changed that added that self-sufficiency on 3-4 unit properties. I was in the pre-approval process when I was suddenly told that I couldn’t get into the 4 plex in Long Beach because 75% of the rents wouldn’t cover the mortgage. We bought a duplex instead; and I feel like that’s the best option for first time home buyers in SoCal. FHA, 3.5% down, on a duplex. I also have the golden handcuffs; so I appreciate the conventional/5% down tip! It’s one of the options I’m looking at. So here’s the outside-the-box question: if you STR rental a duplex/SFR, for 2 years, does that help your borrowing power to qualify for a house every (other) year within 100 miles?

[@tellasnichols805]

Literally broke down my game plan but I didn’t know all the details so thank you 🙏

[@TJ-th9hw]

Great content gents! I learn something new today “MIP”. Thanks for the video!

[@Juansvq37]

This is dope, this was the product I was looking info on but only got so far, I know you guys went into depth a little but after you guys get done with the main real state products can you guys maybe double back and teach us more about this one. Also thank you for the knowledge it’s empowering being 22 learning how become financially free from elder folks who have done what you’re interested in. Keep up the good work and thank you again.!!!

[@Touchatt]

I’m a Gator. I do short term transactional funding for EMD, gap and double closing funding so you can get more deals under contract. I can also connect isn’t PMLs and HMLs.

[@americanfoundafilipina4832]

I contacted Christians company and I have been very happy with the service!!!!

[@lailaatallah1857]

So helpful. Learning about the FHA loan in COMPARISON to a conventional loan was super informative. It’d be helpful to hear more use cases and how people with particular challenges can buy their first, second or third investment property. Which product can tend to help people with lower incomes? Which product might work for someone who has a high DTI after their first investment property, but wants to buy their second? How would someone who has a lot of assets but not a high income be able to buy their third rental property? Etc.

[@tazeev]

Your show is so good but I’m calling my bank tomorrow to see if they have an FHA loan. I can get this three Plex with. Thanks for all the great information.

[@Nohelygarza]

This is very helpful! I’m trying to understand more on how to make money with multi family properties/real estate I’m glad I found this channel!

[@SeanLuc_Photo]

Thank you for this info. As a current Gold Handcuff person, learning how I can get released from those cuffs was very helpful.

[@erikanoxid]

Very helpful!! I have never heard of MIP!! Thx for this GEM💎

[@rebekahcurtis538]

Helpful! Thank you….gave me some ideas for my primary SFH and FHA financing. Planning to buy a MF next but wasn’t sure what to do to free up the FHA. Located in AR and was one of Henry Washington’s students.

[@biggerpockets]

Great to hear!

[@tonyalutzTML]

If still taking show suggestions: how to business hack with an SBA 504 or 7a? Not sure if this is a topic that could be considered because it’s lender specific. Please keep the Mortgage Monday show running, everyone learns so much from you guys!

[@Touchatt]

I’m a Gator. I do short term transactional funding for EMD, gap and double closing funding so you can get more deals under contract. I can also connect isn’t PMLs and HMLs.

[@MrThyberg44]

Thanks for the great episode. Would love to hear more about VA loans!

[@ivanr77]

Came here for multi-family info was baited into an FHA overview. Thanks for the 101 i didn't need.

[@Tonyayt]

I would like to see more videos like this. Great content and guest!

[@biggerpockets]

You got it!

[@TEFgolfer11]

Very helpful! Christian is my favorite recurring guest

[@crypto_ai_v2]

Do some full videos on management companies virtual and non-virtual and what is a good percentage to agree on

[@wowwhydopplhavemyid]

Thank you this is great..! kinda hard for someone like me who barely knows anything about realestate but excited to dig more into this. Thanks again!

[@collierant]

Can you explain the DCSR loan for MultiFamily since I can’t live in the four plex I want to buy

[@christianbachelder8608]

This is on its way!

[@seamus203]

This video was helpful in a broad way. There are many restrictions on the types of properties that work with FHA, in my area especially (CT/NY) it seems sellers have realized that there are so many big-time buyers and investors in the market still right now, they no longer are willing to make any improvements or adjustments on properties, everything is selling on an 'as is' basis. This in turn rules out the possibility of using the FHA loan due to its restrictions. What about 203k loan option, which I believe is a variant of the FHA loan?

[@LloydSmithEntrepreneur]

This helped a lot thanks. Gave me a great idea of how everything works.

[@KilleenRealtor]

Great episode! Perhaps an episode regarding VA loan and strategies to use that to its highest potential ?

[@christianbachelder8608]

its coming!

[@itsbibi7777]

If I purchase a multifamily using FHA can I put rental income and expenses in an LLC bank account or do I have to deed my home to an LLC? Want to know so I know what to report come tax time.

[@widehotep9257]

For tax law, most small LLC's are "disregarded entities". This means you get the liability protection from having an LLC, but pay income/capital gains taxes as though there is no LLC whatsoever. You definitely can and should put an FHA-financed rental into an LLC. Not doing so would be foolish, because if the property is only your name, a tenant could sue you and end up taking all your personal assets if they win. The LLC limits liability (losses) to the assets owned by the LLC. I used incfile to set up my LLC. They provide all the forms you need to set up a bank account under the LLC name. When you go into the bank to do this, they will need to make copies of the LLC's articles of incorporation, Fed Tax ID number/letter from the Federal Government, and the "banking resolution" that shows the LLC is allowing you to take care of banking. Call ahead to your bank and ask them what they need. It is VERY IMPORTANT that you are disciplined with your LLC bank account. You must document any deposits from yourself as a loan to the LLC, and all withdrawals must be documented as either legit expenses OR a legit distribution of funds or repayment of loans to LLC members. Getting sloppy with this could LOSE your LLC liability protection. Same thing goes for credit cards issued to the LLC. For example: If you get sued by a tenant and their lawyer sees that you spent $1,000 of LLC funds at a gentleman's club in Las Vegas, you are in major trouble! Call your bank ahead of time to make an appointment to see what they need.

[@widehotep9257]

Also, in most states real estate transfers between an LLC member (owner) and the LLC are exempt from most transfer fees. You COULD buy a property in your own name, but then transfer it to the LLC later (Your own personal residence, for example). However, if you have a mortgage to buy the new property, you'll need the mortgage note and home ownership both in the LLC. They'll still use your credit to issue the financing. You'll be a guarantor of the loan.

[@tammybooth5279]

You guys are awesome! I learn sometging new everytime I listen in. Thanks Again

[@JamMillion]

Very helpful I will be doing this when I purchase my first property

[@matthewburkholder1076]

This is one of the best episodes ever!

[@devonscope6222]

The zooming in and out is killing me

[@skarhead7597]

This isn't in any way important

[@applesyo]

Super helpful, going to re watch after work. Looking to buy my first house (duplex) so this helps a lot

[@biggerpockets]

Best of luck!

[@MR-zf4rw]

David, you always provide value. Love it man. Thank you.

[@chibsryder]

Love this episode, thanks David. I would like to see a video on low down payment options for foreign investors. As a Canadian, what are my options to buy a house using a low down payment + DSCR if applicable OR an option to buy a house without putting anything down because I got 20% equity in the buy. I need an institution that rewards getting properties with equity by skipping the down payment

[@jaredcoburn4644]

Learned some valuable details. I really appreciate this type of video.

[@thatflywelshguy9662]

Can you guys cover the “replace your mortgage” since you guys are advertising for them? We looked into it 2 years ago but they were variable rates which I was not willing to do knowing how things were going (I was right about rates rising) and RYM also wanted a significant chunk to be a “member”

[@ProvocativeCrew]

You guys answered a lot of questions I was wondering about thank you

[@Patientintime]

Im glad i found this video im a truck driver and always wanted to invest into a property i make about 8k a month currently my expenses are low my monthly expenses are 1650 so im saving a lot was looking into this fha loan im renting a studio apartment right now to save money and kinda want to buy a quad plex or triplex i found a few in idaho and a few in utah im currently in California like you said way to expensive i found 1 in utah for 425k for a triplex which i woupdnt mind living in for the fha loan process also is there a way if i wanted to pay off the fha loan faster once im in or wpuld you recommend a dofferent loan for this case thabks

[@widehotep9257]

Smart move! You can own up to four rental UNITS and finance them with conventional 30 year fixed rate mortgage. Any more units than that and you need to get a commercial loans. Commercial loans are much worse because they have variable rates and balloon rates, so if interest rates get real high in five years, it could wreck your rental business. Also, commercial loans require 25% down, whereas conventional 30yr fixed rate mortgages require only 20% down OR much lower downpayments if you are willing to pay PMI. Also, if you are on the road and a tenant has a furnace die at midnight on a Wednesday in February, how are you going to fix it? It has to be fixed NOW or the pipes will freeze and your building will be ruined and the tenant will sue you! As a landlord, you will definitely need solid plans AND RESERVE FUNDS for emergency repairs. Relationships with local contractors are vital (HVAC, plumbing and appliance repair are the top 3). Or you could hire a real estate management company to collect all rents, do record-keeping and handle repairs for a percentage of your gross rents (6 to 10 percent). They'd invoice you additional fees for the repairs, but at least the emergencies would be handled immediately. That plan is convenient, but it gets expensive. Good luck!

[@tyjameson7404]

Give us another podcast on how many VA loans a veteran can obtain 🙌🏾🙏👏🏿

[@cabinkingglampking]

David Greene’s beard is on point! Lookin good!!

[@michaelburrell4685]

Great episode! Fantastic information always. Thank you @DavidGreene24 and @Biggerpockets. I would like to learn more about VA loans next. Specifically if you could partner with a veteran to get one on a property. My father is a veteran but I am not. Thanks again!

[@mtrcx1]

Thanks for the video. My wife and I are looking to purchase our first home in the Bay Area (Peninsula, SSF, ideally) and are looking for a multi-family home to house hack. As you mentioned in the video, FHA loans in high cost areas aren't ideal. We have some family help and our own savings for down payment and we have excellent credit. What is the best loan option for people in our situation?

[@victorterrazas-castro7089]

Great information. Any change having an episode on an All In One loan? I hear this loan helps payoff your mortgage faster. Thanks!

[@happycappy9606]

I love this straight forward content! More of this please!

[@chancelor3235]

I had a question about FHA loans. When using one to buy a single family home and house hacking, can you use 70% of rents to help qualify for the loan?

[@seanwilliams4398]

This was INCREDIBLY informative. thank you for the breakdown

[@biggerpockets]

Glad it was helpful!

[@seanpatrickbarnett]

Love these deeper dives. Can you go over HELOCs

[@stevenyoo4648]

Great Video, will you guys make a video on the new FannieMae product? the 5 Percent down on residential like 4 plexes?

[@PatrickWiggins-g3c]

I really enjoyed this one and how easy it is to understand!

[@rebaneal4047]

So informative!

[@tylerjack6300]

Another great video! Learned so much!! 👏🏾💯

[@croftonstreetllc7695]

awesome show packed with very useful info!

[@counterproof]

I would like to hear about a multi family loan where you buy the land and build a four unit property.

[@denicelopez9467]

Nice! Thank you for this very helpful. Can you do conventional loans now? Please

[@alejandromorales5822]

Very good info, thanks 🤙🏼🤙🏼, how long should I wait to refinance from a FHA loan, don't really like those PMIs.

[@christophercrossman6967]

I'd love to learn more about Construction Loans

[@Dio2a]

MORE DEEP DIVES like this video 🙏🏽💯

[@theodoreroberts3407]

This is what I need. At least a two family that I live in one. I'm a first time buyer and a senior. So, let's start there. What can you tell me to help me get this and how much will it cost me?

[@williemaewatson2043]

Thank you! I love Bigger Pockets; I've learned so much through your platform. Getting a conventional want to buy a l FHA loan next, I want to buy a Multifamily home a four plex if possible, but having a hard time finding one in Michigan any suggestions?

[@ChristianTorresOnly]

5:53: but if you refinance out of the fha loan you still can’t count your rental income ? Or am I missing something

[@jickumathew6949]

Interested in learning more about financing to purchase a rental portfolio, recasting opportunities and such

[@elizabethdlcrz]

Love the content!

[@adasanabria7022]

I just need to know more about having multiple FHA LOANS and more in depth as to how that works.

[@luxt.v521]

What is single-family with ADU? @ 9:53

[@sanaathedivine5749]

I'm house hacking my 5 bedroom in Cleveland ( renting 4 bedrooms short/medium term leasing) ive never taken a loan I'm thinking i should go with a fha instead of equity loan 🤔

[@aceofslayz]

Thank you for building with us

[@kathleenvillagomez9211]

Very helpful and inspiring. Thanks

[@Lovepinkdress]

This doesn’t work in current environment with multiple offers as sellers don’t like fha loans as more restrictions during inspections and obviously they don’t want the deal to fall through. Thsi will work when no offers and sellers are desperate. Hopefully this time comes in the next year or two.

[@JaiKumar-pn2so]

great info. thanks for sharing, qq, if I live on the FHA loan property for a year, can I put it on airbnb or rent after staying for a year there? and what are the consequences if property owner don't follow the rule and put it on airbnb or rent it out as soon as purchase?

[@BarbaraLouis]

How many loan types are out there, and how to you qualify for a loan with low income?

[@ganson4411]

That was great! Thanks to both of you!

[@Bellawalsh-girly]

Very helpful as always!!!

[@soniabeigi8868]

please help me,😢I have a problem;I always get caught in the middle between the buyer and the seller. "The seller says they won’t provide the financial information to the buyer without receiving an LOI, while the buyer says they won’t submit an LOI without first seeing the financial information. Why isn’t the seller satisfied with just a POF and an NDA? The buyer has the right to review the property’s details before submitting an LOI.

[@PartyTimeProDJs]

Can someone use an FHA loan for the purposes of high debt to income and or low credit score, but avoid MIP by either having 20% equity or putting down a 20% down payment? Or is MIP automatically added on an FHA regardless of equity/down payment?

[@Touchatt]

I’m a Gator. I do short term transactional funding for EMD, gap and double closing funding so you can get more deals under contract. I can also connect isn’t PMLs and HMLs.

[@faithharris143]

Very helpful. Thank you both!!

[@bsktproductions5658]

thank you this was great and very informative.

[@bellabluejungle]

My bad. Here's the fix. MIP-Mortgage Insurance Premium is for FHA loans when people pay under 20% down and their terms are more complex. The PMI- Primary Mortgage Insurance is an extra insurance on a different type of loan when you pay under 20% down. *Also note that you can get non FHA home loan by paying under 20% down. Talk to a lender about the details & your options.

[@RealtalkwithTammy]

Great video 😊

[@MrP00p1]

great infomation !! thank you

[@michaelmartinez3723]

Does this apply for getting/setting for 3rd property.

[@AberrantArt]

Any loan products or advice for someone investing from out of state??? 🤔 And specifically in rental properties not a personal residence.

[@kristyansantos9175]

Can I have a VA loan and a FHA loan at the same time? I bought a duplex with VA and for my next house hacking I would like to use FHA.

[@AR-ts2qr]

Refinance if rates ever go back down. Fed already announced they won’t be going back down. We’ll see

[@shelvonbrooks2307]

Fantastic information

[@LuisJimenez-fj3ho]

Correction: Mortgage insurance is discontinued automatically once mortgage gets to about. I think about 78% of its purchased value.

[@danz1lla1]

I had a question for the VA loan. I just want to know if you needed 90 consecutive days of active duty time or is it 30 days consecutive but 90 days total?

[@Tesla99]

Building a 4plex would cheaper right?

[@emanuelcollado1343]

I have been doing this for years

[@igorgarrido7252]

Can I buy a 4 unit and still rent 3 of them and live in one?

[@giniestudio8975]

Love this show thank you

[@zaccabral4572]

I had a lender tell me i cant move from one multifamily to another multifamily using a fha loan if i was moving to a single family i could is this true? I live in Massachusetts.

[@massguy9625]

Great information. Thank you.

[@biggerpockets]

Thanks for watching!

[@jessicaharding512]

Learned great tips can you do one of these on the VA loans

[@christianbachelder8608]

On its way!

[@alexjbriiones]

Yes, but what if this is an investment property and I will not be living there? Then what, where is my 3.5%?