If you’re thinking about getting into the investment game, we’ve got good news for you. A four-unit apartment building is right in the sweet spot for prospective investors.
Today we’re going to talk about the sweet spot for first-time real estate investors: four-unit apartments.
What I love about four-unit apartment buildings is this:
1. Four-unit apartments are treated like a single-family home as far as financing is concerned. Any building with more than four units is considered a commercial property, but a four-unit building can still be bought with an FHA loan and 3.5% down. It’s a great way to start bringing in cash flow right away with your first purchase.
2. Interest rates are utilized as a residential loan. A commercial loan is always going to have a higher rate, but you can void that with this type of home.
3. You can buy a more expensive home when it has multiple units. If the bank qualifies you for a $200,000 loan on a single-family home, they will also allow you to purchase a four-unit building with a much higher purchase price.
“A commercial loan will always come with a higher interest rate.”
If you’re thinking about hopping into the investing game, this is a great way to get started. If you have any questions for me or need any assistance getting started, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.