You can buy the whole building and let the tenants pay the mortgage. People have been doing this quietly for decades.
Owner-occupier financing is not only for single family homes. FHA can finance a property of two to four units as long as you live in one of them. Rent from the others offsets your payment. California has also opened up accessory dwelling units considerably in recent years.
The effect is straightforward. Your tenants pay down your loan instead of your landlord's.
You are also signing up to be a landlord. Repairs at eleven at night. Vacancies. A tenant who stops paying. This is a job. Anyone selling it to you as passive income has never actually done it.
So run it as a business or do not run it at all. Budget for vacancy and repairs from month one. The people who come unstuck are the ones who budgeted for neither.
Small multi-unit buying works almost everywhere.
The short version
- Rent the rest to cover the payment.
- People have done this quietly for decades.
- FHA can finance 2 to 4 units you live in.
- Rent from the other units offsets the payment.
- California has opened up ADUs considerably.
- Your tenants pay down your loan, not your landlord's.
- Anyone selling this as passive income has never done it.
Talk it through with Kini
Kini will run it with you on your real budget, anywhere in Orange, Los Angeles, Riverside or San Bernardino County. No charge and no pitch.
Book a consultation or call or text (323) 320-1725. See this month's numbers for your county.