What if you’re the first home you buy paid for itself each month? It’s very possible to qualify for an FHA loan for your first home AND acquire a rental property at the same time.
The Multifamily Real Estate approach means you’re securing a property, living in it, and renting the other units out to tenants. Once you qualify for a property that passes the self sufficiency test you’re well on your way.
Only applies for 3 & 4 unit properties.
Can the property completely pay for itself if you’re no longer living there.
Business Credit
Even though most FHA loans want your property to be move-in ready, there still exists the reality that you’ll need funding for some key elements along the way. You’ll need capital available to make landlord-type provisions for the property. We’d suggest business funding.
Creating a business entity specifically for managing this property’s interests is a great move. You’ll then want to establish business credit and with the steps below you can have your business capitalized within a month. Walk into any national bank with the following tasks taken care of and you should be looking getting approved same day for at least a $10,000 credit card*.
- 720+ FICO Credit Score on all 3 credit bureaus
- Registered Agent (Texas)
- Virtual Business Address
- LLC with a general marketing business name
- Employee Identification Number
- NAICS Code 541613 (since you’re establishing this business to help market the property for tenant use)
- Virtual Business Phone
- Website
We’d also suggest opening at least 5 total banks accounts to cover your business considerations. Separate banks may seem like overkill but it’ll start to make sense after you’ve secured least $10,000 in business capital from each institution. It’s also good practice to have diversified banking for separation of concerns.
- Bank for depositing Income
- Bank for holding Profits
- Bank for Marketing expenses
- Bank for Operations
- Bank for Taxes