First Time Househacker Questions

[Mo Rezk]

Hi everyone, 

I recently became a Pro member because I'm quite serious about becoming a real estate investor and becoming financially free. I've been in talks with a few lenders and one in particular sent me a model of what costs could look like, and it's seeming to be a lot more than I expected. I wanted to post here and consult some more experienced RE vets and make sure I'm not getting screwed here.

I'm currently looking for a multi-unit property to househack in southeast MD. One lender sent me this: 

• -$650K Sales Price
• -2-4 unit property
• -VA Loan 30 year
• -2.875% - 0 points
• -$3,875 – includes allotments of $650 property taxes and $180 insurance
• -$26,535 – cash needed at closing to cover closing costs and escrow collections.
• -$24K reserves – this can come from non cash retirement account – 401K, IRA, etc
• -Assumes the property will generate $1,800 NET rental income

Q1) Isn't private mortgage insurance not necessary for a VA loan?

Q2) Are cash reserves a mandatory requirement to purchase a multi-unit property? If so, is $24K a normal amount? My fiance and I have 3 sources of income between us (2 jobs and VA Disability) and we can afford to make the monthly payments even with no renters, so it seems a bit excessive.

Q3) The lender also mentioned that he could provide a $6500 credit in exchange for raising the interest rate to 3.375%. Is there any stipulation to lender credits of any sort, or is that basically just free money towards the closing costs up front?

Thanks for your time, hopefully I can get some answers on this stuff. Really excited to get my journey started.