Las Vegas Homes, Condos, Land and Commercial Real Estate Blog

Buying foreclosed fourplex or duplex condos in Las Vegas for cash flow

So far I have explained HomePath financing that Fannie Mae allows for their foreclosed homes, condos and high rise condominiums for owner occupied home and condo buyers, but this is not all you can do.

The best way for an owner occupied Las Vegas home or condo buyer to make money to help with the mortgage is to buy a Las Vegas duplex or fourplex, live in one condo unit and rent the remaining condos. The other way is to buy a Las Vegas home with a casita and rent the casita or renting individual rooms or some older homes have guest quarters which can be rented but these are more expensive and not the subject of our discussion.. Most fourplexes and duplexes in Las Vegas are in older neighborhoods and need repairs done. These condo buildings will not qualify for a mortgage since they will not appraise before repairs are completed, thus cash buyers are the only candidates to buy them. NO MORE.

Buying  Las Vegas Fourplexes or Duplexes as owner occupied home and investment property

Las Vegas, Henderson and North Las Vegas condominium buildings with up to 4 condo units is considered a single family residence and can be financed as such. Now owner occupied home or condo buyers can buy more than a one unit home or condo, they can buy a duplex or fourplex in Las Vegas as owner occupied homes and rent one or three condos to gain cash flow to help with the mortgage. This is not cheating and is permitted by the State of Nevada.  

Buying a duplex or four-plex in Las Vegas allows for the low down payment that is specific to owner occupiers which is 3.5% for HomePath Loans for Fannie Mae owned properties.  If repairs are needed then the buyer can finance through the FHA Purchase and Rehab All in One Loan (203K loan) to finance their deal.

Four-plexes can be purchased for as low as $100,000 and the owner can rent three condo units for $500 plus per unit.

Having your renters pay your mortgage for Las Vegas fourplex and put few hundred dollars in your pocket.

EXAMPLE:

This is a hypothetical example and I have used numbers that simplify the example in order to make a point. Repair costs can be $5,000 or $25,000. Let’s say an owner occupied Las Vegas home buyer chooses a fourplex and obtains:

$120,000 mortgage loan from Fannie Mae at 6% interest rate

Spends $11,600 to fix the condominium units, Repair costs =$11,600

Pays 7% for mortgage origination and closing costs = $8400

Total out of pocket cost to buy and repair a Las Vegas fourplex= $20,000

Mortgage interest payment and $500 per month for other costs (taxes, vacancy, etc)= $720+$500=$1120 monthly payments.

Condos in the areas that these duplexes and fourplexes are located rent for $550-$750 and $600 per month is a conservative estimate. Renting three condos in a fourplex provides the owner with $1800 in gross income;

($1800-$1220=$580) net profit and you live in your own home for free. Cash on cash return for this fourplex is $580×12=6960/20,000=35% Cash on Cash return on investment .

Social networking: Las Vegas homes, condos and commercial real estate page on Facebook

In the next post I will explain financing Las Vegas real estate investments for Las Vegas real estate investors.