Bank Hunting When You Are Already Loaded (a manner of speaking)

[Stephen McKnew Colonna]

Everyone has to start somewhere--thankfully, this is the place to which we were lead to find enduring freedom and sustainable wealth.  My partner and I want to break the paycheck-to-paycheck cycle, renting ourselves out to someone else so they can have what we want.  That said, we are looking for a small (2-4 unit) multi-family property (buy and hold, rental) in the Austin, TX area.  We've been through the sacrifice and save drill--hence borrowing is a choice not a mandate.  But BP schools me that leverage is the way to go.  I went to my bank, Navy Federal Credit Union (NFCU), but I think I can do better elsewhere.  NFCU limits investment properties to 15-year loans, 15% down, with the stipulation that I must do the deal on a house-hack basis.  I live in Korea where my current employment has me and my teenagers are in high school.  FINALLY THE QUESTIONS...

1.  If I were to use the bank terms summarized above but chose not to follow the house-hack rule, how likely is it that they would know? what would happen if they found out? is it worth the risk?

2.  Any recommendation of a good community in the Austin area in which to focus my search?  Perhaps someone in the BP community can recommend a reliable realtor, broker, etc?

3.  Lastly, is there a better financing choice with which any of you have had success without the limitations of NFCU?   

I know, new-comers have so many basic questions, but I am reading BP publications as fast as I can.  

Respectfully,

Steve C.

[Evan Polaski]

@Stephen McKnew Colonna, I do not invest in Austin, so cannot recommend a specific lender.  But I can tell you my lender hunt was as simple a google search, in your case: "Austin, TX mortgage" or Austin, TX bank.  This will spit off hundreds of results.  I learned quickly that for non-owner occupant, you need to steer clear of the big names, i.e. Chase, Bank of America, Huntington, etc.  They only want traditional mortgages that will be sold off.  You want the bank with 1-12 branches all in the area.  

Non-owner occupant held in an LLC (assuming you are holding in LLC) will go to commercial side. I used a local lender that does 75% LTV, 20 yr am, 5 yr term with a flat $500 "refi" fee and rate reset, if I wanted to extend another 5 yrs without pulling cash out. But with enough phone calls you will be able to find a wide array of rates and terms from local lenders.