A very good agent who works with me, Marcus, got a client of ours into an FHA deal on a fourplex last week.
Does the property need work? Yes.
Is it in the best location in the world? No.
Is the buyer going to make a lot of money on the deal? Almost certainly, yes.
It isn’t rocket science. If you can figure out how to do an FHA deal on a fourplex, you’re going to put down 3.5-5% to buy. In this case, we’re talking roughly $25-30k to buy a more than 4,000 sq ft apartment building with parking.
Sure, the deal won’t cashflow to begin. But, because the buyer is retiring such a large loan, his all-in return is going to be pretty amazing.
Now, I don’t want to get everyone all excited. It’s not like there are a million of these deals just sitting out there to be done. Marcus hustled a bit and the buyer, understanding how amazing it is to be able to make an FHA deal work on a big fourplex, has been very open to looking at areas that he might have ignored if he were more of a snob or less well informed.
We’re certainly not over the finish line yet. I will update you as we move through inspections and the loan contingency. But, for now, I’m feeling like FHA isn’t quite dead yet.