Anyone have experience doing this? How does it work? Is it a headache or is there any type of legal issues with this method? I would love to start investing using little to no money down. However I don’t want to make mistakes if I can help it. Any and all advice would be greatly appreciated.
You can always start off on house hacking a multifamily in MI 1-4 units with min 5% down or 3.5% down for FHA. This will allow you to acquire more rental units and also being able to use the vacated unit rents at 75% to help your debt to income ratio DTI. There is a FHA 100 mile rule if you do plan on using FHA on your 2nd house hack. The fha 100 mile rule will be triggered whenever you try to vacate your current primary and also trying to use the rental income to qualify.
However, this 100 mile rule can be exempted for the following rules
Relocation
Increase in family size
Vacating a joint owned property
Non-occupying co-borrower
If you are not trying to use FHA on your 2nd house hack, you can use conventional and the rules that I mentioned above will not be a concern.
The low money down loan options are for primary residences so you would have to have the intention of living there.
My first rental property was a quadplex that I purchased with the VA loan. The building was fully rented so I signed a document saying I had to move in within 60 days. It actually took 4 months to move in. But life took a different direction, and I left after only a couple month and rented the place back out. It is all about intention, don't go into it without planning on living there.
You can always start off on house hacking a multifamily in MI 1-4 units with min 5% down or 3.5% down for FHA. This will allow you to acquire more rental units and also being able to use the vacated unit rents at 75% to help your debt to income ratio DTI. There is a FHA 100 mile rule if you do plan on using FHA on your 2nd house hack. The fha 100 mile rule will be triggered whenever you try to vacate your current primary and also trying to use the rental income to qualify.
However, this 100 mile rule can be exempted for the following rules
Relocation
Increase in family size
Vacating a joint owned property
Non-occupying co-borrower
If you are not trying to use FHA on your 2nd house hack, you can use conventional and the rules that I mentioned above will not be a concern.
The low money down loan options are for primary residences so you would have to have the intention of living there.
My first rental property was a quadplex that I purchased with the VA loan. The building was fully rented so I signed a document saying I had to move in within 60 days. It actually took 4 months to move in. But life took a different direction, and I left after only a couple month and rented the place back out. It is all about intention, don't go into it without planning on living there.
I guess what I meant to ask was has anyone had experience claiming the quadplex as their primary, all the while living at their real primary residence? I would essentially “rent” to my brother-in-law and still live in the house.
If you claim you will live at the property for good loan terms but never intend on actually living there it's occupancy fraud and you could potentially get into legal trouble.
The low money down loan options are for primary residences so you would have to have the intention of living there.
My first rental property was a quadplex that I purchased with the VA loan. The building was fully rented so I signed a document saying I had to move in within 60 days. It actually took 4 months to move in. But life took a different direction, and I left after only a couple month and rented the place back out. It is all about intention, don't go into it without planning on living there.
I guess what I meant to ask was has anyone had experience claiming the quadplex as their primary, all the while living at their real primary residence? I would essentially “rent” to my brother-in-law and still live in the house.
Don't do it. What you are describing is fraud. Plain and simple. Also, for the record, this is a public forum and your name is there for all to see.
Hey @George Drexel, I spent many years as a mortgage loan officer. The rule in the industry is that you must live in the property as your primary residence for at least the first year.
After that, you can move out and hold the property as a rental. But the other posters in this thread are correct, if you apply for an owner-occupied loan and never move in, you're committing fraud.
Hey @George Drexel, I spent many years as a mortgage loan officer. The rule in the industry is that you must live in the property as your primary residence for at least the first year.
After that, you can move out and hold the property as a rental. But the other posters in this thread are correct, if you apply for an owner-occupied loan and never move in, you're committing fraud.
Best of luck!
Well just so you know I will not be doing this because I was unaware this is fraud. Thanks for the enlightenment.