When considering a purchase of a multi-unit investment property, the first item on your to-do list should be financing. Let’s face it, in today’s high-price real estate market, most people cannot afford to pay cash regardless of the market they’re in.
The good news is, if you want to buy a duplex, triplex or fourplex you’ll be able to use standard residential financing to make a purchase of a property for up to four units. The benefit of using residential financing is that you’ll be able to get a thirty year fixed loan at whatever favorable market rates happen to be available at that time.
Conventional Loans
Let’s say you are looking to invest at least 20% down and buy 2-4 units strictly as an investment property. For this purchase you can use standard Fannie-Mae / Freddie Mac loans.
FHA Loans
If you plan to live in one of the units, but rent the others out, you can utilize a low-down payment FHA loan to make the purchase. In fact – depending on the state / county you live in -FHA allows for increased loan limits for duplex, triplex and fourplex properties. Follow THIS LINK to find out the limits in your local area.
VA Loans
As with any VA mortgage – as long as you intend to live in one of the units – you may purchase a multiplex property using VA’s No Money Down financing for Veteran’s as long as you qualify. If you exceed the VA Loan Limits, you may still qualify with an out-of-pocket contribution to the down payment. Learn more about VA loan limits HERE.
The ability to use fixed residential financing certainly makes purchasing a 2-4 unit property – either to live in or strictly as an investment – worth it. Why not live in one of the units and let your tenants pay a large part of your mortgage for you. I highly recommend that you seek out a quality residential mortgage officer to discuss if you qualify for any of the above programs, but once you do, buying a duplex, triplex, or fourplex property in any market makes great financial sense.
Whether you want to receive the highest and best offer on your fourplex or are investing in a twenty unit multi-family apartment building – Doug Taber can help. Doug is an apartment market specialist with the Apartment Realty Group in San Diego, California. He works with investors who want to buy, sell, and exchange rental units and apartment buildings.
Want to purchase San Diego investment properties? Call Doug Taber today at (619)483-1031.
