Need advice on what you would do for FHA loan
Member since 2020 · 4 posts · 1 vote
Need advice on what you would do for FHA loan
Most Popular Reply
Josh GreenBusiness Member
Realtor · Tampa/St Pete/Clearwater/Bradenton · Member since 2020 · 396 posts · 353 votesQuote from @Leo Tamcsu:
I am 19, Currently in college, have a 790 TransUnion score, never missed a payment on any of my debts/loans. School is all paid for by scholarships so all my debt is in 4 rental cars that my parents helped me co-sign with. I spend 5-6k on average on credit cards a month for my reselling business that I do too. Have had a job since 2019 at a restaurant. Have up to 30k I can put down on to a property. Obviously I want to leave my hometown and move around until I find a place I like, but I plan on doing a FHA and living there for a year with the other rooms either airbnb or tentent and once I can move out, will rent out my room. What would you guys do in my situation, what type of property, what are some good areas (Currently in Tampa)
Thanks
Hey this is awesome! My wife actually does reselling full-time (we both were engineers and both of us now do our own businesses full-time). Love the hustle spirit! We moved from SLC which has been a top 10 metro the past decade in appreciation. Not to be biased, but I think you should start your REI journey here in the Tampa bay area. If you look at any charts you'll see that Tampa was one of the hottest markets in growth and one of the lowest among those in decrease. This is because the demand has been, is and will continue to be outpacing the supply. This is because of the desirability, price-to-rent ratios, job and infrastructure growth/outlook, and more. The BEST way you can start is with a solid house-hack. You can still get deals here that, as a house-hack, eliminate most of your entire PITI (principle, insurance, taxes, interest) even with a low-down and higher interest rate environment (relative to the past 3 years, but not high historically).
What that means is you're able to comfortably cash flow when you move out and while living it in aggressively save. This is how my wife and I started off our investment portfolio and were able to save at a pace for 1 property/year and now are are able to increase that pace. Couple this with the current environment: the herd mentality of normal buyers (and a lot of inexperienced investors) is that now is a bad time to buy. Well, that's a perfect time right now to actually get a deal for at or below appraisal value AND get some seller credits (unheard of a few months ago). So, you're actually able to get these cashflowing properties with less out-of-pocket than you could 6-36 months ago and are able to immediately increase your profit once the herd mentality returns (rates will dip, demand will flood back, prices will go even higher) and you go to refinance to a lower rate, with higher rents, and higher equity through appreciation. In addition, the TB market has outstanding opportunities to increase cash flow through short and mid term rentals. I actually do a lot of those now and can help there as well. When you decide to move, I got the best PM out here that will take care of your property if/when you leave! If that sounds like a plan to you, I'd connect with @Raymond J. Rodrigues right away to figure out what you can qualify for and if you qualify for any special programs to reduce your downpayment or closing costs even further!
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8 Replies
- Lender · Fort Lauderdale, FL (Lending in FL CT GA MI PA) · Member since 2022 · 470 posts · 349 votes3y
You're setting yourself up for a great financial start, well done! I would probably try to get a four-unit with that FHA loan. You'll be able to use projected rental income to qualify and having separate units should make for an easy transition out if you decide to move after a year.
- Member since 2020 · 13 posts · 5 votes3yLeo, seems like you're on the right track and off to a great start. I think you'll probably struggle to find a good priced multi unit in Tampa but if you do then definitely would be an awesome option. Purchasing a house with a lot of bedrooms that you can rent out individually is a great strategy, especially in a college town. You can also use a conventional loan with 3% down which tends to be a little more appealing than FHA to some agents.
- 3yDevin PetersonBusiness MemberLender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
Leo, first and foremost - WOW! You are motivated and give yourself a huge pat on the back. Nice saving. I think your goals can and will be achieved through house hacking. I am in Tampa myself! Why don't we connect some time. Sent you a PM!
ProAlpha Capital56 Reviews - 3yRaymond J. RodriguesBusiness MemberLender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
Hi @Leo Tamcsu, if you're looking to buy in the Tampa Bay area with your current job that you'll be using to qualify for your home purchase, I suggest reaching out to @Josh Green. He is an expert in the area and has helped my clients successfully invest in real estate. He is also a very strong negotiator! I hope this recommendation helps.
Helm Mortgage Corp.5125 Reviews - Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes3y
Four car loans? Say you have $1400 in car payments that is subtracted from your restaurant job. Why so many autos?
No student loans at all?
How much income w-2 from the restaurant in past two years?
To buy today you need to find property in driving distance from the restaurant to be considered owner occupied.
If you were finished college and have a degree plus job offer in the line of degree we could use the job offer income plus first check as your income.
- 3yJosh GreenBusiness MemberRealtor · Tampa/St Pete/Clearwater/Bradenton · Member since 2020 · 396 posts · 353 votes
Quote from @Leo Tamcsu:
I am 19, Currently in college, have a 790 TransUnion score, never missed a payment on any of my debts/loans. School is all paid for by scholarships so all my debt is in 4 rental cars that my parents helped me co-sign with. I spend 5-6k on average on credit cards a month for my reselling business that I do too. Have had a job since 2019 at a restaurant. Have up to 30k I can put down on to a property. Obviously I want to leave my hometown and move around until I find a place I like, but I plan on doing a FHA and living there for a year with the other rooms either airbnb or tentent and once I can move out, will rent out my room. What would you guys do in my situation, what type of property, what are some good areas (Currently in Tampa)
Thanks
Hey this is awesome! My wife actually does reselling full-time (we both were engineers and both of us now do our own businesses full-time). Love the hustle spirit! We moved from SLC which has been a top 10 metro the past decade in appreciation. Not to be biased, but I think you should start your REI journey here in the Tampa bay area. If you look at any charts you'll see that Tampa was one of the hottest markets in growth and one of the lowest among those in decrease. This is because the demand has been, is and will continue to be outpacing the supply. This is because of the desirability, price-to-rent ratios, job and infrastructure growth/outlook, and more. The BEST way you can start is with a solid house-hack. You can still get deals here that, as a house-hack, eliminate most of your entire PITI (principle, insurance, taxes, interest) even with a low-down and higher interest rate environment (relative to the past 3 years, but not high historically).
What that means is you're able to comfortably cash flow when you move out and while living it in aggressively save. This is how my wife and I started off our investment portfolio and were able to save at a pace for 1 property/year and now are are able to increase that pace. Couple this with the current environment: the herd mentality of normal buyers (and a lot of inexperienced investors) is that now is a bad time to buy. Well, that's a perfect time right now to actually get a deal for at or below appraisal value AND get some seller credits (unheard of a few months ago). So, you're actually able to get these cashflowing properties with less out-of-pocket than you could 6-36 months ago and are able to immediately increase your profit once the herd mentality returns (rates will dip, demand will flood back, prices will go even higher) and you go to refinance to a lower rate, with higher rents, and higher equity through appreciation. In addition, the TB market has outstanding opportunities to increase cash flow through short and mid term rentals. I actually do a lot of those now and can help there as well. When you decide to move, I got the best PM out here that will take care of your property if/when you leave! If that sounds like a plan to you, I'd connect with @Raymond J. Rodrigues right away to figure out what you can qualify for and if you qualify for any special programs to reduce your downpayment or closing costs even further!
Impact Realty Tampa Bay.4.962 ReviewsSuncoast Vacation Homes4.959 Reviews - 3ySasha MohammedPro MemberLender · Costa Mesa, CA · Member since 2018 · 337 posts · 245 votes
Hi Leo!
First off, Kudos! not many your age thinking about this stuff yet. I'll try to break down a few initial thoughts simply, forgive me if its a bit disorganized.
FHA 3.5% down payment for MF really only applies to duplexes. You CAN do 3 and 4 units with 3.5% down, but do some digging on "self-sufficiency test" for 3 and 4 units. this poses a bit of a challenge in my market (CA), may pose a challenge in yours too.
Your serving job may be considered "variable income" and will be averaged over a 2-year period if you're not full-time. Tips (reported tips), overtime, bonuses... all a 2 year average. may be worth making sure you are considered "full time" or have "full time employment" before you apply for a home loan; otherwise, taking a few less hours here and there could result in dropping your purchasing power in the 11th hour.
Self-employment needs 2 year's history, but if the car payments are part of a business, you may be able to exclude these payments from your DTI ratios (the expense would probably have already been hit against your gross income, no reason to hit you twice). i'd have to look into it, but... are those car payments made out of a business bank account? or your personal?
Hint for self-employment income: "depreciation" write-off is gold, saves you $ with uncle Sam, AND can be added back in for DTI calculation purposes. Talk to your CPA about this one.
If you can stomach room mates, the bedroom rental house hack is fantastic. TBH i'm doing this myself. Depending on the loan limits in your area, and what you qualify for with income, you may be able to do 3% or 5% down on a single-family, conventional financing, and be in a significantly better loan than FHA. I guess the big question is -- how much do you value your privacy :) also maybe look into SFR with an ADU.
hope this was helpful to some degree! Wishing you the best of luck on this journey!
- 3ySarita ScherpereelBusiness MemberReal Estate Agent · Chicago, IL · Member since 2018 · 659 posts · 376 votes
@Leo Tamcsu House hacking is a great way to start. If you're looking at a 2-4 unit property don't forget that FHA has a self sufficiency test for 3 and 4 units. Best of luck to you!
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