6340 Westfield Blvd, Indianapolis, IN 46220
(463) 207-0234austin@austincoon.com

Getting Started

Financing Your First Investment Property

Worksheet · Author: Austin Coon

Financing decides more about your first deal than the property does: it sets your down payment, your rate, your payment, and therefore your entire cash flow. Most first-time investors only price one path — this worksheet prices all of them.

The core principle: owner-occupied loans are dramatically cheaper than investor loans, and the strategies that qualify you for them (house hacking above all) are the cheapest entries into real estate.

The four paths

  • FHA (owner-occupied, 1–4 units): 3.5% down with a 580+ credit score; carries upfront and monthly mortgage insurance. The classic house hack loan.
  • Conventional (owner-occupied): as low as 5% down with PMI that drops off at 20% equity; stricter qualifying than FHA on multi-unit.
  • Conventional investment property: 15–25% down, higher rates, no occupancy requirement.
  • Commercial (5+ units): 20–30% down, 20–25 year amortization, and the property must qualify through DSCR — most lenders want 1.20–1.25×.

The math that decides affordability

  • On a $150,000 30-year loan, the payment moves from roughly $805 at 5% to roughly $998 at 7% — a $193 monthly swing that can flip a deal’s cash flow.
  • Lenders credit about 75% of documented rental income toward qualifying on owner-occupied multi-unit purchases.
  • Budget roughly 2% of the price for closing costs on top of your down payment.

Before you shop

  • Ask Austin for a lender introduction — pricing all three owner-occupied paths takes one conversation.
  • Get pre-approved before touring, not before offering; sellers take pre-approved buyers seriously.
  • Rerun every deal at +1% interest. If it only works at today’s rate, it doesn’t work.

Common questions

Do I have to put 20% down?

Only on a pure investment purchase without an owner-occupied strategy. Live in the property and 3.5–5% paths open up — that single decision changes the required cash by tens of thousands of dollars.

Can I use rental income to qualify?

Usually 75% of documented rents from units you won’t occupy — via existing leases or the appraiser’s market-rent estimate on owner-occupied multi-unit loans.

What about 5+ units?

That’s commercial: the property’s NOI must cover debt service 1.20–1.25×, amortization shortens to 20–25 years, and lenders will haircut your NOI to market vacancy. The Commercial Underwriting Model on this site runs that math.

Want to run this with Austin?

Bring your address, your numbers, or just your questions — Austin works through them with you before you\u2019re committed.