Union City, NJ 07087 · Member since 2020 · 26 posts · 5 votes
I've been in the hotel industry here in NYC for the past 5yrs (still there) which of course has taken a huge hit with the pandemic. I really want to get into small multifamily, but I haven't been working full time since the pandemic started and my hours have been highly reduced. How long would it realistically take me for a bank to take me serious on a loan? Like when I get back to full time and have that consistent income coming in, how long would the wait be for me to get approved?
Currently I have up to 80k saved up (60k in a high yield savings & 20k in my checkings)
I want to get into househacking 4plex's using the FHA 203k loans while only putting in the minimum 3.5% DP and later on refinancing into conventional loans, and keep doing that year after year.
If that's not possible, is there another type of loan I can use where I won't have to wait the 2 years to get approved for a loan?
Financial Advisor · Los Angeles, CA · Member since 2021 · 141 posts · 58 votes
4y
Hey @Gabriel L. asset-based loans are great! Since the property being financed is for rental purposes, Lenders consider the subject property as being the 'asset' --not necessarily referring to the assets in your bank account. These loans are qualified based on the subject property and the cash flow it produces. Employment history is irrelevant in these transactions. I'll message you with more details
Hey @Gabriel L. asset-based loans are great! Since the property being financed is for rental purposes, Lenders consider the subject property as being the 'asset' --not necessarily referring to the assets in your bank account. These loans are qualified based on the subject property and the cash flow it produces. Employment history is irrelevant in these transactions. I'll message you with more details
Financial Advisor · Los Angeles, CA · Member since 2021 · 141 posts · 58 votes
4y
@James Alderman No, you don't need to own the property first, these loan programs can be used for purchases. Also, the subject property can be vacant at the time of purchase, because Lenders will look at market rent comparbles to qualify as income. Months of rental data is not needed because the appraisal will include the rent schedule.
@Chris Whynder I will message you directly for more details
Lender · PA · Member since 2019 · 533 posts · 461 votes
4y
Hey Gabriel four things to keep in mind if you choose to purchase a 4plex with DSCR money:
(1) You can not live in it.
(2) You need six months reserve in a liquid or retirement account to qualify.
(3) You need a good credit score to get a decent rate which will be in the mid 6 percent range right now.
(4) You need 20 percent down. *
With those four things in mind a DSCR loan may be your best option if you are not working. You should run any property past a mortgage broker before making an offer to purchase. Good luck
* Also no lates on your current mortgage or other mortgages last 12-24 months.