For an owner/occupant investor who might be limited on funds, the 3.5% FHA down payment is fantastic! And if the other units already have tenants, the lender will even factor those rents into your loan qualification.
For example: Say you wanted to buy a $500,000 4-plex. Instead of the usual 20% down ($100,000) as required on so many commercial loans, you could buy this same $500,000 property with an FHA loan at 3.5% down, or $14,000, so long as you intend to occupy one of the units.
I once had a buyer who was a hospital chaplain; had a small inheritance he could use for a down payment, but his monthly income was very limited; so qualifying for a mortgage on his income really limited his home choices.
So we switched gears. Instead of a house, I was able to find him a really nice 4-plex. Because three units were already rented, the lender counted those rents toward my buyer’s income. In fact, the other three rents actually covered his monthly mortgage note. So he was able to ‘bank’ his own ‘rent’ each month to build a cash reserve; perfect to cover things like a periodic vacancy or major repair.
But the ‘wealth’ part is that over time, as property values go up, so does your net worth. And we all know that rents consistently go up, not down… meaning income that keeps up with inflation. So call me if you want help finding a multi-family home to start building your own personal wealth.