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I'm 22 - can I buy a duplex or quadplex?

Hi, I'm 22, married. College has been too expensive for me to afford by myself, no family support in the financial department, and I am lucky to be employed at a call center that pays a very decent wage with plenty of overtime, telecommuting. However, I don't want to work here for my entire life.

I would like to start investing in property.

However, I'm under the impression that a first time home buyer, without at least stellar credit and 20% down, can't purchase any kind of investment property. While my credit is pretty good and getting better, I don't have the means to save a 40k down payment. I would really like to buy a duplex, triplex or quadplex where I can live in a single unit and manage the others to pay for my mortgage. From there, I could move on to buying other properties as time goes on.

Is this possible? How can I make this a reality?

Thanks!
Kayla
  • July 08 - Denver
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Answers (7)

Profile picture for CarlLarson
The short answer is yes. And I am proof, I bought my first investment property at 18, and I have aligned myself with a lender who specializes in working with both first time home owners and investors. As it has been mentioned, FHA has great programs for buying properties and currently these offerings can be combined with grants here in Colorado, I would love to talk this through with you.
  • July 23
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Kayla
I have been seeing more and more 20 to 25 year olds purchasing homes.  You will be way ahead of your peers by seeing this through.  Homeownership at such a young age is a great thing.  As for as your down payment is concerned; a 3.5% FHA loan is available to you.  The 203K rehab loan is a great way to go.  You can buy a property with up to 4 units as long as you occupy one of the units.  This loan enables you to take out more money to make repairs and modernize the property.  There are also conventional loans available to you with 5% down.  I would speak to a local lender, they will be able to help.  Good luck!
  • July 10
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First thing to remember, not all lenders are the same or have the same programs. have your realtor get your qualified with what you can afford. last thing you want to do is burry yourself in debt you can not afford. my first home was an investment property but I had time to manage the tenants. Some lenders will allow rental income to help you qualify. less down will equal a higher payment and pmi or mmi. which can be dropped when the lender feels the risk is below 80% ltv. keep up the good work with good credit, it will pay off in the long run.

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  • July 08
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Hi Kayla,

I just helped another young first-time homebuyer with purchasing his first home, and he purchased a 4 unit home off of 40th and Kalamath in Denver.  

He got a great deal, because the property was in really bad shape, however we went with an FHA 203k loan, and he was able to borrow for the money needed to remodel the property on top of the money needed to purchase the property.  

He's now living in the largest unit, and renting out the 3 other units.  His mortgage payment on the 203k loan was $2,000, however we just refinanced him into a conventional mortgage loan, and we were able to get his payment down to approximately $1,700 since the value of the property went up based on the rehab, and he's not got over 20% equity, which in turn means he did not have to carry monthly mortgage insurance on his new conventional mortgage loan....he collects a total of $3,800 in rent from the other 3 units, which not only covers his monthly mortgage payment, but gives him approximately $2,000 in added income each month.

I'd be happy to chat with you further should you have interest in learning more about an FHA 203k loan, or purchasing multi-unit homes.

Thanks!
  • July 08
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Kayla,

There are several options for your for 2 unit and 3 unit purchases.  Our mortgage company is local here in Denver and we are very familiar with all the products associated with this type of purchase.  FHA has a low down payment option that may suit your needs if you plan on living in one of the units.  Please feel free to call me at 303-910-7015.  
  • July 08
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It is possible Kayla, it's a matter of speaking with a lender and finding a property that suits your needs and budget. A duplex or triplex in the right community would be a great way to start.

Good luck!
  • July 08
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Kayla,

I would love to have you speak to one of my Lenders. Since they are the ones lending the money, they are the ones to give their blessing to your purchase. My Nephew just purchased his first rental property, so don't get discouraged. If this is too big of a step for you first purchase, perhaps there is a baby step you can take towards your bigger goal. 
  • July 08
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