To be honest, in order to answer your question more thoroughly and in depth and to help you weigh out the pros and cons on each scenario. It will take more than the answer I am providing at this point.
I will do my best simplifying my answers:
If you are planning to purchase a SINGLE FAMILY HOUSE or CONDO:
- Most lenders require a minimum of 25% of down payment in order to get a good interest rate for a 30 yr. fixed loan. Recently I have closed a deal connected my buyer to one of the major bank loan specialist and closed at 4% interest rate. But if your down payment is under 25%, the interest rate will tend to go higher.
- In compare to a duplex or multi unit complex under 4 units, you will have an easier time getting the loan from most major lenders if your tax records and financial information get approval from them.
- If you are thinking of putting in up for sale in future, ratio wise you will have more potential buyers that will be interested and will qualify for a loan to purchase your single family home or condo.
- Additional note for you, and that is from passed 40 to 50 yrs real estate statistics, single family homes' equity goes up almost double than condos' equity in the Bay Area.
If you are planning to purchase MULTI-UNIT COMPLEX:
- Most major lenders are more strict with the qualifications. The minimum % of down payment is higher than single family and condo. Since the lenders see it as income properties. If they loan you the money, they are have more risk in not getting the loan back if you cannot rent out the units....etc.
- After you purchase the multi unit complex, if you can continue to have tenants occupied them, then you can show steady and/or good income. That will be good for future sale when you do put them on the market. But in general the ratio for buyers that can qualified for a loan to purchased multi unit complex are much lower in comparison to single family house or condo.
Lastly, you need an experienced realtor who have deal with many of this situation and have a wide network of professionals to help answer all your questions, so you have all the necessary information to weigh out what's best for your investment. Please check out my website: http://www.helenkwong.com
Hope my answer help.
Have a good day!
Helen Kwong, Realtor@