Tebogo Molefe on township property investment

First Class Property SA, is a disruptive organisation, that focuses on tackling different conundrums within the real estate market, especially for township people looking to invest in property. First Class Property SA has numerous properties, and rents them out to its clientele. Their focus is to educate, invest, and diversify their portfolio in property dealings, while opening up the market. We are now joined by Tebogo Molefe from First Class Property SA for more.

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How To Buy An Investment Property With An FHA Loan (House Hacking)

Looking to buy an investment property but getting stuck with how big the down payment requirement is? Say hello to house hacking!

The FHA doesn’t allow anyone to purchase an investment property, but there’s an exception! You can purchase a home as a primary residence (meaning you live in the house) with up to 4 units.

Here’s how it works, you find a house that has 2, 3, or 4 units. Then, you apply for an FHA loan…

You live in one unit and rent out the others!

So, now you have other people paying your mortgage for you. And the best part is that FHA loans are some of the easiest loans to qualify for. Not only that, but your down payment is only 3.5% down minimum.

A lot of people refer to this investing strategy as “house hacking” since you’re creatively finding a way to start investing without requiring all of the money and experience normally required to buy an investment property.

Now, you most likely don’t want to live in the FHA loan forever. So, how do you get out?

The big thing we have to keep in mind is that when you use this strategy, you must follow all occupancy laws. You signed paperwork when you closed on the deal saying that you would live in the home as a primary residence. For most lenders, this means you need to live in the property for about a year.

Specifically for FHA, they want to see you live in the house for a year and have 25% equity in the property before you purchase another home without refinancing the FHA loan into a Conventional investment loan.

You can build 25% equity in your FHA loan by (1) paying down your mortgage and (2) gaining appreciation in your home through the market or improvements.

Using the FHA loan is a great way for many people to get a solid intro into the investing world with minimal risk and effort.

Hey, my name is Kyle and I’m a Mortgage Advisor serving Ohio and Tennessee. My goal is to help you get a crystal-clear home loan that helps you win the house you love.

Here’s how to contact me:
– Call/text: 937-249-0481
– Email: kyle.seagraves@mottomortgage.com
– Start your pre-approval at https://kyleseagraves.com

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NMLS# 1701021
Motto Mortgage Alliance
937-264-8000 ext. 4
8900 N. Dixie Dr.
Dayton, OH 45414
Equal Housing Lender
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