Hassles of buying a Triplex in Oakland, California

[Jen Anderson]

Hi all,

Was hoping for you some advice/answers to my many questions.  I am planning on House Hacking by buying a Triplex in Oakland and then occupying 1 of the units, renting out the other 2. I found the perfect property, but of course the price is quite steep given it's Northern California. Here's my questions:

1. The lender I have gotten pre-approved through says federal law requires a 25% downpayment on triplexes. This alone is a HUGE chunk of cash. Any way to get a loan without this much of a downpayment (and please don't suggest FHA or VA loans. FHA will not make me a competitive bidder).

2. He is saying I have to have 6 months' worth of P&I + Insurance and tax payments in a reserve account. Again, that is a LOT of extra money I'll need in addition to a hefty downpayment

3. Closing costs are VERY high- transfer tax is estimated at $9K.  Why so high?

Does anybody have any suggestions for alternatives lenders that might have more flexibility?  Particularly around this 25% downpayment rule?  Any other creative ideas/suggestions?

Or should I just walk away from this and focus on lower cost markets instead?

Thanks so much!
Jen