So how much house can you afford? A question that you should be asking yourself if you're even in the market for a primary resident and or an investment property. One thing that's become very, very popular recently is a multi-family meaning that it's a two to three to maybe four unit property and I want to share with you on how using an FHA loan it it requires minimum down payment and you you would actually be able to qualify for more than what you actually would qualify if you were to buy a primary residence. And let me explain. So I really hope that you learned something new and if you would like to see more videos like this all I literally ask you to do is drop a thumbs up and subscribe to the channel and share your thoughts down in the comment section.

Now one of the things that I want to share with you is, well, how can I minimize how much I need to put down right and I want to start sharing my screen with you so you guys can see exactly what it is that I'm looking at A multi-family home is pretty much just. it's going to be an investment property for you and traditional and investment property requires twenty percent down. But you can actually get a multi-family FHA loan and live in it for at least 12 months. So it's going to be owner occupancy.

so you're gonna have to live in one of the three units. And the goal at least in this area, right? there's some for 700 000. there's some for a half a million. There's some for three hundred thousand.

The goal is to find a Triplex And let me explain the reason I'm saying that the goal is to find a Triplex is. well, I don't know how much you make right? but let's say that you make anywhere under a hundred thousand dollars a year. Traditionally, they always say that your gross or your mortgage should be less than 30 percent of your gross income. Now obviously that doesn't really leave you much to work with because at that point let's say that you make a hundred thousand dollars a year.

That's eight thousand, three hundred, and Thirty three dollars a month. I Mean, at that point, you're really working with around twenty five hundred dollars, right? It's not very much when it comes down to mortgage, uh, an actual mortgage as of right now, especially for an investment property in the eight hundred thousand dollar range. But one thing that I want to share with you is the reason you want to use an FHA loan versus a conventional is because of the down payment incentive. Right away, you go from a 20 needed down payment on a conventional as it's an investment property.

and if you go with an FHA it's a minimum of 3.5 percent. So let's say that you have a goal of purchasing a multi-family three unit. Triplex for eight hundred thousand dollars. That means in the perfect in a perfect world you're 3.5 percent would be equivalent to 28 000.

Now, at that point, it doesn't seem that far-fetched right, especially if you're in the market for potentially buying an investment property. From thinking that you have to put 20 down now to only three point five percent, twenty eight thousand dollars is a little bit more realistic to work with. Now let me explain to you the fun part because you're doing an FHA and you're doing owner occupancy. The reason I'm saying that it should be a Triplex or a um, a four unit property is because I want you to live in one, right? and this is what is needed with an FHA loan.

The really cool thing about this is even in the in the Um, in the smaller one, right? let's say it's a Triplex Uh, this would be a three unit property. You live in one and you rent out the other two. The really cool thing about this FHA loan as you're working towards qualifying, it's let's say that you find your actual Triplex Let me try to find one real quick in the 800 000 range. So let's go down the list.

The really cool thing about this is uh, this would have been a good one. Would it have been? Uh, no, that's a two unit. So that's a two unit. Um, let's see.

Let's see. I'm gonna have to get one eight hundred thousand. Okay, so 865 000 but again, it's been posted for 10 days. Let's say I can negotiate all the way back down.

Um, to you know, eight hundred thousand In a perfect world? Obviously right? In some areas it's going to be more. In some areas, it's going to be lost. But the really cool thing about this is that you can actually use 75 of your projected rental income from the triplex to actually qualify for your FHA loan. You might be like Ricky I Don't make a hundred thousand dollars a year, Dude.

I don't care, right? if you work with a lender, especially one that's maybe a little bit more creative rental rates this is in Phoenix Arizona Can go anything above twenty five hundred dollars a month, right? It's a two bedroom, one and a half bath. Whatever the case might be per per unit, right? So you have a total of three of them, It looks like one of them might actually be a three unit one. The really cool thing about that is, well, let's say that your projected rental income and they're gonna try to find ways to verify this, but you want to be as realistic as possible, but also as aggressive as possible because you get to use 75 percent of that rental income to actually qualify for that lunge. The really cool thing about this is like Ricky I make sixty thousand dollars a year? Well, let's do the quick math right.

Let's say that you rent out two of the three units. That's an additional at twenty five hundred dollars a month, which is very realistic. in Arizona Some can go up to three thousand, but again, I'm going on the lower end. 25 000 I'm sorry, twenty five hundred per unit.

So you're renting out two, you're living in one that's five thousand dollars a month that you are now going to be reporting right. You're going to be collecting ads rental income you can report and use 75 of those five thousand to actually qualify for that loan. So what that's equivalent to is around three thousand. seven hundred and fifty dollars a month.

Or forty five thousand dollars additional a year is what you actually can now utilize to qualify. So yeah, you might only make sixty or eighty thousand dollars a year, but now you get to add forty five thousand dollars a year to your overall income right because of your projected income by buying this property by renting out two of the units and being able to use 75 of that actual rental income. So you went from being able to maybe afford a you know, four hundred thousand dollar primary to now being able to afford right because your your income not necessarily doubled, but you add an additional forty five thousand. Now the really cool thing about this is, um, when asking the question of well, how much is your mortgage I went ahead and I pulled this up I Wanted you guys to see in a perfect world, right? Eight hundred thousand, three point five percent is 28.

Uh, thousand dollar down payment? It's a 30-year loan. Average interest rate is six point One five percent. Again, this does not include PMI So that's probably going to be an additional two to three hundred dollars. Whatever the case might be, the goal is to get rid of the PMI and the goal is to have 20 Equity The really cool thing about this is that well, let's do very quick math right.

You're going to be buying this Triplex and you're going to be collecting five thousand dollars a month, right? 2500 per unit and you're going to be living in one. Your mortgage in a perfect world is fifty three hundred dollars. So fifty three hundred dollars you're out of pocket is going to be in a perfect world around three hundred dollars, right? And then after 12 months of own your occupancy so you live in it and after 12 months, guess what? you can do a cash out refi and or just refi into a conventional loan, You can hopefully that property value has increased and at one point it's going to have at least 80 percent, right? Um, what? I'm sorry. Uh, after a while, you hope to have at least twenty percent equity, which at that point will get rid of your PMI So therefore, your mortgage payment should be a little bit cheaper.

Hopefully, interest rates go down. So therefore I mean for those that are asking, well, how much can interest rates actually change it? Let's say that we go to a 3.5 interest rate, right? That goes, and takes your payment from a fifty three hundred dollar monthly payment to four thousand dollars. That's significant, right? But again, we're not looking for the perfect world. We're looking to keep it as realistic as possible.

So we're going right back to that. Um, 6.15 The reason I'm sharing this with you is because after 12 months you can do that. Cash out. I'm sorry you can do that refinance to a conventional loan.

and once you do that, you don't have to live in that property anymore if you don't want to. So now you went from five thousand dollars a month. Even if rental rates stay the same, you now can rent out that third unit. Now you're collecting 7 500 a month.

And the great thing about that is, well, now you can use that and report it and use that to be able to qualify for another Triplex and then continue this whole process, right? The really cool thing about this is even in a not so perfect world, right? If rental rates stay the same. the beauty of being able to use an FHA loan to minimize your down payment of 3.5 percent. You can leverage 75 of your projected rental income to therefore qualify for more than what you could actually qualify as an individual. Or if you were to purchase a primary, that's what I wanted to share with you.

Those are the incentives of being able being able to utilize an FHA loan. Buying a Triplex investment property, you do have to do owner occupancy and again, I mean speak to A lender right? One of the one of the biggest challenges that I feel like a lot of people encounter is it just seems so unrealistic for them to purchase a property. But how do you know If you you know, how can you work towards something because I'm sure if you're watching this video, your go out one day is to own a property. So how can you be working towards something yet you have no plan in place the way that I was able to do it at 20 years old as I moved from California to Arizona I got in contact with the real estate agent and I got in contact with a lender.

They built me a road map of what I needed right or my income needed to be where my credit score needed to be what I needed for a down payment. Those are difficult conversations because it makes you very, very vulnerable and I and I know and I get that. but you can't work towards your goals if they don't set that plan in place. So think about that.

it's 2023. If that is actually a goal that you have for this year. I Want to connect you with one of my friends his name is Nick Palladino He's a real estate agent here in Arizona Not only is he was a real, not only is he a real estate agent, but he's also a real estate investor. and he even has short-term rentals.

So he's very well connected. so it doesn't matter if you want to go on the primary side on the investment side and or the rental property side right. We do house flips, we do rentals, and he even does Again, the traditional real estate side of things. he's very well connected.

I'm going to link him down below to the first link in the description and now is the time to have those difficult conversations if you're interested in buying, if you're interested in flipping, if you're interested in in buying your first. Triplex I Want you to understand that there are systems out there just like this: FHA Loan with a minimum down payment, the projected income to help you qualify for more than what you actually think you can, but again, you have to have those vulnerable conversations. So again, I'm going to link his information down below. You guys can message him via Instagram and if you have any other questions, you can feel free to comment down in the comment section.

I Hope we stay connected again. I Really like making these videos? Uh, if you have any questions that you would like me to answer in future videos, then feel free to shoot me a direct message via Discord That's that first link or send me a message via Instagram and that's that third link in the description down below. Um, other than that I Really do appreciate your time. Hope that we're into thumbs up! Please consider subscribing And like always, let's make sure that we're in the year on a green note.

Take it easy team!.