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FHA Multi-Unit Investment Strategy
Live in one unit, rent out the rest. Cover your mortgage with rental income using just 3.5% down. Nevada FHA house hacking lets first-time buyers build wealth while living virtually rent-free.
House hacking is an investment strategy where you purchase a 2-4 unit multi-family property with an FHA loan, live in one unit as your primary residence, and rent out the other units to cover most or all of your mortgage payment.
With just 3.5% down, you can become a homeowner AND a landlord simultaneously. The rental income from your tenants pays your mortgage while you build equity and live nearly rent-free.
Nevada Example:
Buy a $450,000 triplex in Henderson with $15,750 down (3.5%). Live in one unit, rent two units at $1,400/month each = $2,800/month income to offset your $2,400 mortgage payment.
FHA loans require only 3.5% down payment on 2-4 unit properties, making investment real estate accessible with minimal capital.
Qualify with credit scores as low as 580 (or 500 with 10% down), more lenient than investment property loans.
You must live in one unit for at least 12 months. After that, you can move out and keep it as a rental investment.
Lenders can use 75% of expected rental income to help you qualify, even before you have tenants in place.
Your tenants pay down your mortgage while you build equity in a multi-unit asset instead of just renting.
After 12 months, move out and buy another FHA multi-unit property. Build a rental portfolio one property at a time.
| Purchase Price: | $380,000 |
| Down Payment (3.5%): | $13,300 |
| Closing Costs: | $8,000 |
| Total Cash Needed: | $21,300 |
| Loan Amount: | $366,700 |
| Mortgage Payment (P&I): | $2,150 |
| Property Tax: | $265 |
| Insurance: | $180 |
| FHA MIP: | $255 |
| Total Monthly Payment: | $2,850 |
| Rental Income (1 unit): | $1,350 |
| Your Net Housing Cost: | $1,500/mo |
Your Benefit: Instead of paying $1,500 in rent and owning nothing, you're paying $1,500 and building equity in a $380,000 property while your tenant covers half your mortgage!
| Purchase Price: | $520,000 |
| Down Payment (3.5%): | $18,200 |
| Closing Costs: | $10,500 |
| Total Cash Needed: | $28,700 |
| Loan Amount: | $501,800 |
| Total Monthly Payment: | $3,900 |
| Rental Income (2 units): | $2,700 |
| Your Net Housing Cost: | $1,200/mo |
Your Benefit: With a triplex, two tenants pay $2,700 combined, leaving you with only $1,200/month to live in a nice unit while building equity in a $520,000 property!
Assuming 3% annual appreciation and normal mortgage paydown:
Work with an FHA-experienced lender who understands rental income qualification. Discuss your house hacking plans upfront so they can structure your approval to include projected rental income.
Search for duplexes, triplexes, or fourplexes in your target Nevada market. Focus on areas with strong rental demand (Las Vegas, Henderson, Reno, Sparks). Work with a real estate agent familiar with multi-unit properties and the local rental market.
Pro Tip: Look for properties where rent for similar units is at least 1% of the purchase price per month (1% rule) to ensure positive cash flow.
Submit your offer with an FHA financing contingency. The property must pass FHA appraisal requirements, which are stricter than conventional loans. Include inspection contingency to identify any needed repairs before closing.
The FHA appraiser will evaluate the property AND provide a rent schedule showing fair market rents for comparable units in the area. This rent schedule is what your lender uses to calculate your qualifying income. The appraiser inspects all units for FHA safety/soundness standards.
Bring your 3.5% down payment plus closing costs to the table. Sign your FHA owner-occupancy certification stating you'll live in one unit as your primary residence for at least 12 months. Receive keys to all units.
Immediately move into your chosen unit to satisfy FHA owner-occupancy. If other units are vacant, prepare them for tenants (clean, minor repairs, market them). If units are already occupied with tenants, review existing leases and collect rent.
Run background and credit checks on applicants. Verify income (aim for tenants earning 3x monthly rent). Create solid lease agreements following Nevada landlord-tenant laws. Collect security deposits and first month's rent.
Nevada Law: Security deposits cannot exceed 3 months' rent for unfurnished units. Must be returned within 30 days after tenant moves out.
Set up rent collection systems (online payments recommended). Maintain the property and handle repairs promptly. Keep excellent records of income and expenses for tax purposes. Consider property management software or hire a manager if you prefer hands-off approach.
Once you've lived there for 12 months, you have options:
Get pre-approved for an FHA multi-unit loan today and start building wealth through house hacking. Our Nevada FHA specialists will help you navigate the process from pre-approval to closing.
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Valley West Mortgage - NMLS #65506
Nevada Mortgage Lender License
Licensed to conduct business in Nevada
NMLS Consumer Access: www.nmlsconsumeraccess.org
We are an Equal Housing Lender. We do business in accordance with the Federal Fair Housing Law and Equal Credit Opportunity Act. This company does not discriminate on the basis of race, color, religion, national origin, sex, marital status, age, or handicap.
This is not a commitment to lend. All loans subject to credit approval. Rates, terms, and conditions are subject to change without notice. Not all applicants will qualify. Additional restrictions may apply. Property insurance required. Flood insurance may be required. This website is for informational purposes only and does not constitute financial advice. Consult with a licensed loan officer for personalized guidance.