3 Fam Owner Oc - Underwriter not feeling it?

[Jim Sestito]

Hi BP - and Happy Friday

I have lived in my two family for over two years and ready to make a move.  

Looking to house hack again but this time into a 3 or 4 family.

The first lender I am getting pre approved from ran the 'situation' (I do not see it as much of a situation) by his under writer and got the following response,

*****I don’t think this is going to work. If he wants to come off the deed of that 2 unit, or refinance that 2 unit into an investment property, we could do the 3 unit as an owner occupant******

It seems they would be suspicious why someone wants to live in a three family when they own a two and I am just looking to get the benefits of an owner occupied loan and not really live in the property.  I am 100% planning to move into this next property and have no intentions of committing mortgage fraud.

Am I out of loans after my first property!? I ask this with some sarcasm but would love to get the opinion of other investors who may be in similar situation.  

I am located in south shore Massachusetts smack dab between Boston and Providence.

Thanks in advance for the help and conversation.  

Jim

[JD Martin]

I would look at another lender. People do this all the time - O/O a duplex/triplex, rehab anything that needs it, get the other units rented out, buy another, move and rent out their former unit, repeat. We have friends that built a hell of a bottom line doing this in Chicago for 30 years. They bought entire buildings, with loans, and lived in the basement while fixing up and renting out the best units, then moving on to another building.