Hey guys, I’m going to show you how you can lower your mortgage payment, while increasing your purchase price, by buying a multi-family property. Let’s dive into it.
The first thing I want to let everyone know is that you don’t need to be a conventional buyer or an investor putting down 20% in order to purchase a multi-family property. You can buy a 2-4 unit property by putting down as little as just 3.5% or you could even use your VA loan and put down literally nothing for it. So don’t get discouraged – these opportunities apply to everyone out there!
Buy a property with a rental unit on it
This could be a single-family home with an ADU, or a multi-family property with 2 units in the back. Regardless of how you do it, the key is to segment your home and structure your purchase to lower your monthly payment.
Let’s have a look at what your typical San Diego buyer would do, which is shell out about $1 Million for a single-family residence, with mortgage payments going up to about $4,800 per month. If the same people bought a property worth about $1.2 Million but with an ADU on it, they would be able to rent out the ADU for around $1,750 per month. On the face of it, their mortgage payment is now $5,900 per month. But when factoring rent into this, their actual monthly outgoings are just $4,150. This saves you $650 a month even at that higher price point.
Let’s take it a step further and say you buy a multi-family property that has a back building with two small 1 bedroom units in them, and rented them out for $1,750 each. That property costs you a whopping $1.4 Million, with mortgage payments amounting to $6,800 per month! However, by renting out those two units, you’ve effectively brought your payment down to just $3,300, thus saving you $2,000 per month!
In this way, you can actually buy more property with more write-offs and benefits while enjoying a lower monthly mortgage payment!
If you ever have any questions at all, please reach out to us!
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