Remember, Nomad is primarily:
- Buy a property as an owner occupant
- Move in for a year (or so)
- After a year, convert the property to a rental
- Move into your next property and repeat the process
So, the loans you’re usually considering are owner occupant financing. Many Nomads are choosing to do Nomad because they can do it with little or nothing down.
If you are putting more than 20% down then in most cases you will NOT need to move into the property and could do traditional investor, non-owner occupant financing.
Since many are looking for those little or nothing down loans for implementing Nomad, here are the loans you might want to ask your lender about:
Primarily, when we model Nomad we talk about using a Conventional 5% down loan program for all 10 properties.
There may be some times when you could consider a nothing down loan program and it would make sense to do so. For example, if you are a veteran and can get a VA loan, it may make a lot of sense to do a VA loan and buy a duplex, triplex or fourplex for your first Nomad property.
Not everyone can get a VA loan with nothing down (which is primarily for veterans with veteran benefits), so it is not always possible to do so. Again, that’s why we typically model nomad with 5% conventional since the largest number of people doing Nomad can do that loan.
In practice, it may be advantageous to start with buying a duplex, triplex or fourplex with an FHA loan and then make your next 9 purchases with a conventional 5% down loan.
A good lender can help talk you through the options as well.