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First-timer Almost Expense Free


Real estate is considered the best investment that the average person will benefit from in their lifetime. It is usually considered to be a long-term investment. So it is always best to determine the longest time you would live at the proposed property. It is not a good idea to buy a house to keep for less than two years unless you obtain it way below market value. Many people struggle with when is the right time to purchase. In determining the right time to buy are the purchase price, personal stability, and future market conditions. 

Some mortgage companies made it now possible for first-time homebuyers to get loans to buy four-unit buildings with the use of first-time home buyer’s credit. The credits are designed to make homeownership easier, so they come in federal and state grants, tax credits, and other options.

The credits with the residential classification of the multifamily building of 4 units or less make it possible for mortgage companies to fund the purchase of these buildings. It is required the first-time home buyer live in one of the multifamily units as a qualifying factor for loan approval. When the first-time homebuyer occupies one of the multifamily units, it allows the lender to consider the rent from the other multifamily units to use as qualifying income for the initial purchase of the multifamily building. It enables first-time homebuyers to live almost expense-free. 

For example, Joe is a first-timer that bought a 3 unit building for $499,000 in Silver Spring, Maryland. Two of the multifamily units had a rent of $1,300.00 each; the total combined rent is $2,600. The mortgage that includes Principal, Interest, Taxes, and Insurance came to around $2,772.10; the difference is $172.10. Thus, Joe is living in the other unit free from mortgage expenses while the property over time increases in equity. The additional benefit is that the tax-deductible portion of the payment is around $1,615.73.

It helps when you are a handyperson because the purchaser of the multifamily building will be responsible for building management. The management involves upkeeping the building and property. Also, responding favorably to issues that may arise with tenants. The benefits of owning the building far out way the problems of the small-scale management of the building.  

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