I currently own a condo which I occupy, but I would like to become involved in real estate investment. I cannot move out of my condo until May 2012 without having to repay the $8,000 first time home buyer credit. I make decent money, but my mortgage is preventing me from coming up with enough cash to fund an investment deal with a conventional loan, since I would require 25% cash plus reserves. My current plan is to save what I can until May 2012, and then rent out my condo. I could then purchase a property for rehab, and get a non-investment loan with less money down if I occupy the property. This plan would also reduce the impact carrying costs for the property, since I would be using the property as a residence. My question is, is this a viable plan? I see a lot of posts about financing issues for investment property, but have not seen anyone suggest owner occupying flips, which has me wondering if I am overlooking something.
Sometimes you have to sign a form at closing stating you’ll occupy that residence for 1 yr.
Some people do use the plan you’re talking about where they live and fix up for a year or two, then move on to the next one.
I acquired my first four rental properties exactly this way. I bought, owner occupied for a year or two, converted to rental use, then purchased my next primary residence.
After the first four, I started using non-owner occupied loans to purchase my rentals.
Have you considered an 8 plex. Many banks with 8 plexes and larger consider the income generated by the property verses making you qualify for a mortgage based on your personal income or debt load.
Thanks for all of your posts. VanDyne, I hadn’t considered multiple family units, I’ll have to do some research and see if that would work for me.