How To Buy Rental Properties - FHA VS. Conventional Loan

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  • Опубліковано 29 жов 2024

КОМЕНТАРІ • 68

  • @noiramo
    @noiramo 2 роки тому +18

    You do not need 20% down payment for conventional if you are a first time home buyer. It's 3-5%.

    • @nicksimone4786
      @nicksimone4786 Рік тому

      Yeah but you can’t rent that for over a year then

  • @caseyjoo833
    @caseyjoo833 2 роки тому +6

    FHA only have to be occupied for the first year then you are allowed to move. Also for FHA you have to pay for PMI for the entire life of the loan regardless of how much you put down or pay off. Only if you were to refinance to a conventional loan with 20% equity can you drop the PMI. Also you have to pay a premium PMI of 1.75% that is added on to the mortgage with FHA loan on top of the monthly PMI. Think that's also important information to be added for their differences

  • @bekind2429
    @bekind2429 3 роки тому +1

    I’ve watched plenty of videos on this topic... but the way you broke this down was super simplistic and easy to understand thank you!

  • @domjones9890
    @domjones9890 3 роки тому +3

    Question! I’m in the Marines and bought a house back in SC that I’ve been renting out for years, I should have it paid off in the next 2 years. I want to get into real estate investing when I’m out the military in about 4 years. If the house is paid off and I no longer have a mortgage, can I still do a cash out refi at that point so I can just use that money to finance my next buy? Or can you only do that if you currently have a mortgage? Love the info bro, came across you on tictok and been binge watching everything! Shout out to Ohio, my home state!

  • @TheDjangoJoEShowOfficial
    @TheDjangoJoEShowOfficial 2 роки тому +1

    Very clear and to the point.
    Thank you!
    New sub.
    Keep going

  • @kevenmarthzz2651
    @kevenmarthzz2651 2 роки тому +1

    Straight to the point I like that 👌. New subscriber 😉

  • @yannimans1243
    @yannimans1243 3 роки тому

    looking to house hack in the near future. been studying the whole market and studying house hacking as a whole as I am a pair of fresh legs trying to enter the real estate world (and not wait through more classes at university). the market is definitely tough out here in California though definitely gonna be on the lookout for some duplex’s within the area to begin! running with the FHA loan due to the possibility of my first purchase and this informative video.

  • @ctbaze28
    @ctbaze28 3 роки тому

    In the TikTok group. Video was very informative, appreciate it!

  • @Limpsync
    @Limpsync 3 роки тому

    Awesome video. Super love your channel. I believe the latest update for 2020 is FHA requires at least a 580 credit score for 3.5% down. 500-579 = 10% down.

  • @marlonbarnes2787
    @marlonbarnes2787 Рік тому

    Fha loan you have to live in for 1year then ofter you can do what ever with it

  • @AmberZamora01
    @AmberZamora01 3 роки тому +2

    This is amazing FREE knowledge!! Thank you! I do have a question though. Say I wanted to get a FHA owner occupied residence, & house hack. How long do I need to live in that duplex?

    • @CJ-ld1kj
      @CJ-ld1kj 3 роки тому +2

      at least 12 months

  • @cassieneidige97
    @cassieneidige97 2 роки тому

    You have been so helpful! You explanation is for each loan is clear and simple. I love the house hacking idea, I plan to do go with an FHA loan. I'm a first time home buyer.

  • @Jaysterix
    @Jaysterix 3 роки тому

    great video brother !📈

  • @befearless4914
    @befearless4914 3 роки тому

    Thanks man I just subbed

  • @cheddajack6628
    @cheddajack6628 2 роки тому

    This knowledge is fantastic really appreciate!

  • @xavierpetty
    @xavierpetty 3 роки тому +1

    Great video, this really helped simplify a lot of what I’ve been reading on recently.

    • @xavierpetty
      @xavierpetty 3 роки тому

      I personally plan on using an FHA loan. I’ve recently graduated high school, and I’m now working full time while also in college. My credit score is currently a 650, so that’s a plus. Really hoping that the sacrifices early on will lead me to financial freedom in the future.

  • @yeetstreetbuilt
    @yeetstreetbuilt Рік тому

    Great Info, if I'm looking to buy my second house, but didn't use FHA the first time can I still utilize that?

  • @HANDLEYOBUZINESS
    @HANDLEYOBUZINESS 2 роки тому +1

    If you buy a 4 unit and live in one of the units could you rent the other units out to section 8?

  • @cregxy
    @cregxy 3 роки тому

    Subscribed!

  • @Paul_Sullivan
    @Paul_Sullivan 3 роки тому +3

    I recently resigned from my job how do I provide proof of income to get approved for FHA?

    • @wallofstone
      @wallofstone 3 роки тому +1

      You can’t. Unless you can show current stability. They will ask for last 2 months pay stubs and w2’s.

  • @ashkanbayati4933
    @ashkanbayati4933 3 роки тому

    Great video. why do you flip houses with private money? isn't it more profitable with your won money?

  • @cregxy
    @cregxy 3 роки тому

    Awesome info

  • @bijanmachen
    @bijanmachen 3 роки тому

    Awesome video!!

  • @billygraham5589
    @billygraham5589 2 роки тому

    I found a "2 on a lot" (homes) in the Corpus Christi TX area, and I can put down 20%, but the loan broker says FHA will NOT loan on such a property -- I call BS? I have $20K in the bank to buy a place to live, and I would like to buy a rental property, even if I have to put 20% down. The rent rate for the homes in question is about $750 to $850 per month. I will even rent one room out in the unit/home I am living in. The one home I rent out entirely will need some work before I rent. The loan broker says the home has to be in "move in ready" condition. What does that mean? The doors are off their hinges, and the flooring needs some replacing it seems, and maybe some paint. That seems to be about it. I call that very "minor" stuff. But, the property is sold "as is" so I cannot get an FHA loan -- so the loan broker tells me.
    As I see it, I would go "conventional" (and find another loan broker, or go directly to a bank). I say this because I am willing to pay some considerable down payment, but maybe I can get a better interest rate with a conventional loan? If I cannot, then maybe the FHA loan is the best way to go. BUT MY UNDERSTANDING IS THAT IF I TAKE OUT AN FHA LOAN AND DO NOT PUT DOWN 20% RIGHT AT THE START I WOULD HAVE TO PAY PMI FOR THE FIRST 11 YEARS I OWN THE HOME...yes? That sucks. So then I would really ONLY use FHA financing if I was going to just rent the place out and expected the rents to cover the mortgage and bring in a decent positive cash flow.
    The mortgage broker I spoke with said I have to live in the property for at least 3 years if I take an FHA loan -- sounds funny. I say that because I read on the internet that I only have to live on the property for 1 year, and that fits my time frame. (I expect to buy more properties and move into them too if I have to in order to obtain financing.
    The repairs to the "2 on a lot" seem to be paint and flooring -- maybe a little work on the plumbing, but I don't know I haven't seen the properties in person. I'm thinking they don't need much in the way of materials beyond that at this time. It will take me a month to have one ready to rent. With an FHA and a low down I am looking at about $700 going out as rent for the first month while I work on the property. That will be break even as soon as I get a renter, and then I make a positive cash flow. CAN I COUNT THE INCOME FROM THE RENTAL OF THE ONE UNIT ON MY NEXT LOAN APPLICATION? I understand abut 75% will count. But do I have to have renters in there for like 2 years before they will count the cash flow from the rental? At any rate, I will be stuffing about $15,000 per year or more in the bank between my job and my rentals, so I will soon have more money to make another down payment on a new and different rental property. I am already looking at a piece of raw land in the area, 8 acres, but it will need work. I would like to se if I can turn it into a mobile home park. I would put in a circular drive of asphalt and set out lots for the mobile homes. I would need to install some kind of sewage pipe and water pipe and get power to the property. But doing all this I would guess that I would be able to install mobile homes and rent them, or maybe just sell developed lots, or both. I don't know a developed mobile home slot is worth, but I would guess like $30K. And I want to make the slots each like 8,000 sq. ft. so the homeowner can do some nice landscaping and have a nice yard. But that is a dream. I don't know what the development costs would be, though I can see the power lines are already close to the property. The water and electricity are another matter. An access road needs to be put in place too. I would guess $200K in development costs have to be paid to get the location ready for people to move in. Theoretically there could be 35 or even 40 home sites placed there, and at $30K each that is $1,000K to $1,200K gross profit, the net profit being $200K or so less than that. Would be a fun project if I can ever pull it off. Maybe the county government won't let me do it for one bogus reason or another. But I would start with buying rental properties to add to my portfolio, as income producers. (Maybe I can start building homes from the ground up too.)

  • @dsgchannel1111
    @dsgchannel1111 3 роки тому +1

    I like the thought of having tenants help invest in the property deeded in my name. Is there a tactic or an effective marketing strategy that will guarantee faithful tenants?

  • @benlovescono
    @benlovescono Рік тому

    What are your thoughts on using a HELOC on a FHA mortgaged house with roughly 100k in equity as a down payment for a conventional loan on an investment property? Property is currently netting ~30k annually for the owner via Airbnb.

  • @tyereserhodes7645
    @tyereserhodes7645 3 роки тому

    Keep it coming

  • @christianlacroix697
    @christianlacroix697 3 роки тому

    Great info. Thanks for sharing. Are the concepts similar for commercial? Can I do Office Hacking? Are the loan rules similar? In advance I thank you

    • @SIG366
      @SIG366 3 роки тому

      I was wondering same thing

  • @KingRichie13
    @KingRichie13 3 роки тому +1

    Can I buy a conventional 1-4 unit building while I’m house hacking?

  • @thomasjones8378
    @thomasjones8378 3 роки тому

    How do i get that first 7,000 to put down on closing date for that property

  • @saundrayton
    @saundrayton 3 роки тому

    PMI secures the mortgage that the bank lends on gets lended but not the actual home .. youll have to get home owners insurance? Is that correct? Whats the average tax percentage for a duplex in Columbus?

  • @JoshuaLatu
    @JoshuaLatu 3 роки тому

    How are you making 1200 on a duplex when your actually paying 800 for your side of the rent? Can anyone specific pls. Thanks. Awsome video

  • @chronicc5560
    @chronicc5560 3 роки тому +1

    Keep this info going, really informative and I learned a ton!

  • @tomaschamorro8174
    @tomaschamorro8174 3 роки тому

    Hey sir I know u doin good with profits but I need help with money wise difficult situation

  • @ianscianablo8507
    @ianscianablo8507 Рік тому

    Hey Austin. If you're an older person and you can't even fix a cat should you be even thinking of real estate investing? I'm in my 50s! I'm good at cleaning but I'm not a fixer-upper!

  • @saundrayton
    @saundrayton 3 роки тому

    Would you include vacancy and repairs from the money you cash flow?

  • @Adrianx12
    @Adrianx12 3 роки тому

    I’ve heard paying little to no down payment, going with 30 year loan, regardless of PMI and using compounding interest to benefit yourself best... thoughts on this Austin?? It’d be greatly appreciated!!

    • @diogopereira5288
      @diogopereira5288 3 роки тому

      Well if its a multi? Then as long as you have a positive cashflow its ok but undersrand that the less money you put down the higher the risk for yourself and the lender. If its a single family i would definitely put down 20%

  • @SIG366
    @SIG366 3 роки тому

    Can a fha loan be used for a 6 unit multifamily?? Or do you have to find commercial lender

  • @eddiebarraza1951
    @eddiebarraza1951 3 роки тому +1

    how many times can I use a FHA loan? 1 2 or 3 times?

  • @allenzhu3726
    @allenzhu3726 3 роки тому

    what happens when you used all 10 loans

  • @lionsrealmproductions4442
    @lionsrealmproductions4442 2 роки тому

    Why does my realtor say I have to live in the property for 1 year with conventional loan before I can rent it?

    • @AustinRutherford
      @AustinRutherford  2 роки тому

      Different loans have different underwriting requirements. Talk to your lender not your realtor!

  • @LuisRodriguez-wo6nl
    @LuisRodriguez-wo6nl 2 роки тому

    For FHA I thought you could live in the property for only 1 year and then you could rent it out completely is this right???

  • @willkearney7837
    @willkearney7837 3 роки тому

    What if you put 15-20% down on an FHA loan? I'm assuming your monthly payment would go down but would you still need to buy PMI?

    • @diogopereira5288
      @diogopereira5288 3 роки тому

      You wount have to have to pay for pmi if you put down 20%

  • @bekind2429
    @bekind2429 3 роки тому

    I do have a question! :) if I purchase a duplex with FHA loan, can I still Airbnb the other side?

    • @diogopereira5288
      @diogopereira5288 3 роки тому

      I dont see why not, the main qualification to a fha is that the property will be owner occupied.

  • @krispykrisp3719
    @krispykrisp3719 2 роки тому

    If you get a conventional loan for 100% investment, can you move into the house later on if you decide you would like to live in one of the units?

  • @therealloulove
    @therealloulove 3 роки тому

    Can I brrrr with conventional
    Because fha won’t let you for up to 6 months to a year

  • @richybrokenshire1387
    @richybrokenshire1387 3 роки тому

    what kind of loan do i use when im not going to be living in it? (BRRRR)

  • @cuevak3160
    @cuevak3160 3 роки тому

    I plan on using conventional since I have a 73- credit score. But I neeed to figure how I will ‘borrow money, should I go for private money or bank loan?

    • @diogopereira5288
      @diogopereira5288 3 роки тому

      Go to the bank and ask to speak to a loan officer