FOUND MY POTENTIAL FIRST 4 UNITS ( FIRST DEAL)

[Jean-francois Ndomb]

Hey guys,

I am getting ready to buy a 4 unit multi-family property from a friend who does not want it any more but doesn't want it to go back to the bank ( moving on to a different business). So instead of $85k it was appraised at, I am getting it for $71k that he owes on it. Before this, I was shopping for SFH to buy and hold after meeting the FHA requirement and got a per-approval to shop around for $80k flexible ( could go higher, but I did not want to go too high on my first one). I am yet to contact my mortgage agent to get the specifics on this current change, but I would like to get ahead of the ball on this one before I ask him tomorrow. Will my requirements change for this type of loan? SFH to Multi-family. What are the usual requirements for a multi-family?

From the numbers my friend  has given me, 2 units rent for $495/ea and 2 rent for $395/ea. ( Total 4)

Any recommendations on how to go about the conversation tomorrow with the lending mortgage company? if not them, the next one I will be shopping for?

Thank you in advance.

Yours in success,

JF

[Jason B.]

Conventional vs. FHA loan - Meeting the requirements (20-25% down, etc.). My understanding is FHA loans are only for owner-occupied properties, requiring you to occupy the property within 60 days. If you take out an FHA loan but don't meet the residency requirements, you could (in theory) end up being prosecuted for fraud. Even if they choose not to prosecute, the FHA could accelerate the loan, meaning you'd be liable for the entire principal balance in full. Speak with your mortgage broker and make sure he/she knows the property will be an investment, non-owner occupied.

Lastly, I forgot to mention in my earlier post -- congratulations on the first deal.