Here's A Real Estate Investment Idea...So New That A Lot Of People Have Never Heard Of It.

“ Buying multi-unit property with an FHA reverse mortgage -- living in one unit, renting out the others, and NEVER paying a dime in monthly principal or interest costs. ”

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(iRealtyWire.Org) – Here's a real estate investment idea that's so new that a lot of people have never even heard of it: Buying multi-unit property with an FHA reverse mortgage -- living in one unit, renting out the others, and NEVER paying a dime in monthly principal or interest costs.

That's right, FHA now permits seniors 62 years and older to purchase residential real estate using a reverse mortgage. Until recently, reverse mortgages insured by FHA were only available on homes already owned and occupied by eligible borrowers.

But since this spring, the agency has offered a new twist: You can go out and buy a house -- a duplex, tri-plex, or quadruplex -- using a reverse mortgage.

Consider this real-life example:

A married couple in their early seventies is planning to downsize from their long-time home in Las Vegas, which they sold late last year for about $850,000.

They're now looking at a $500,000 tri-plex, with the idea of living in one unit, and renting out the other two for about $1,300 a month each.

The tri-plex would have sold for about $750,000 at the peak of the boom, so the buyers are getting an excellent price for the property.

How could they do all this and never make a mortgage payment?

Here's how: To qualify for FHA's new “home purchase” reverse loan, they'll take a portion of the sale proceeds from their previous home, and make a 35 percent downpayment on the tri-plex.

Then they move into the unit they've chosen for their own personal use, and rent out the other two units in the building for a combined $2,600 a month -- a rent roll that is realistic and attainable under current market conditions.

Since it's a reverse mortgage, the couple never will have to make a principal or interest payment. Of course they will have to pay their local property taxes and insurance, and maintain the property in good condition.

But bottom line, they've got positive cash flow every month that they can use for living expenses. And with any luck, they'll own an appreciating asset that may be worth more in later years.

Plus, when and if they choose, they can refinance the property, pay off the reverse mortgage debt, move out and convert the unit into all-rental so the entire building is investment property, eligible for a 1031 tax-deferred exchange.

As with all reverse mortgages, before plunging into a strategy like this, get solid financial and estate planning advice from an experienced professional. Please let us know if there is anything we can do for you.