Can I buy 2 properties at the same time?

[Ben Cochran]

I am looking at possibly buying 2 properties at the same time. First, I'm going the FHA route and purchasing a duplex to live in and rent out the other side and putting it in my name. Second, my realtor just brought me a really good deal this morning for a fix and flip property. I have the capital to purchase it as well along with a hard money lender, but inside my LLC. I haven't approached my lender yet because I just looked at the rehab house this morning. Would there be any conflicts with purchasing both at the same time?

[Adam L.]

Couple of things: 

As a mortgage loan officer- close on the FHA deal first. FHA is only allowed for primary residences. If you do a simultaneous deal, even if it is all cash, it throws red flags everywhere. There is a lot of mortgage fraud around FHA and people claiming that the home is their primary and it is not.

Secondly, even if the deal is purchase in cash there is still debt that needs to be taken into account on your FHA deal (IE- property taxes and insurance).

Lastly, there is a form that accompanies all residential mortgages called a "Undisclosed Debt Acknowledgement". Basically saying you must disclose all debt that has been open between the time your credit was pulled and the time your loan closes. penalities include: "It is illegal for a person to knowingly withhold debt obligation information regarding a credit application to a financial

institution. Withholding such information is bank fraud. Bank fraud is investigated by the Federal Bureau of Investigation

(FBI) and is punishable by fines of up to $1,000,000, or up to 30 years in federal prison, or both."

 My suggestion- buy the investment home with a partner and have them put the debt (hard money) in their name. One thing LOs/brokers/banks hate is new debt showing up before the loan is closed.