Finally Ready and First time posting

[JR Dadivas]

Hello Bigger Pockets!  My name is JR, and I'm finally ready to dive into this and ready to get my first deal.  I've been a PRO member for the past 5 months, been listening to podcasts and webinars, reading books, analyzing properties with the BP calculators, and trying to learn as much as I can while getting my finances in order and saving up for a down payment and rehab costs. (Thank you Brandon Turner, Josh Dorkin, and David Green, you guys are amazing and thank you for all that you do! I would consider myself a BP student as 95% of my learning has come from this website, books, and all of your podcasts!)

I live in the Chicagoland area, and I'm looking to invest in a 2-4 unit multi-family house hack and try to BRRRR it as well. I would like to use an FHA (+ possibly 203k) loan and am looking for any recommendations on lenders and any recommendations on honest investor friendly agents in Chicago that would like to work with me. The areas I'm interested in are Logan Square/Humboldt Park (I know quite difficult to find a good deal), up north to Avondale, Irving Park, and anywhere along 90/94 or the CTA Blue line. Also wouldn't mind house hacking in Berwyn, and furthest south I would go to Bridgeport/McKinley Park/Pilsen.

I know the next step I need to take is getting pre-approvals from different lenders and see what they offer and what I would qualify for.  My credit score is currently around 780, my debt to income ratio is <20%, and my overall income excellent, although most of my debt is due to school loans, which I'm steadily paying off.  So hopefully I shouldn't have much problem getting pre-approvals. 

My question is, should I get pre-approvals first before talking to agents?  or vice versa? 

Also, with regarding pre-approvals, should I just use the recommended lenders from BiggerPockets (better.com, credible, guaranteedRate, lendingtree, etc.)? or do any of you have recommendations for FHA (203k) lenders in Chicago? I have accounts with PNC bank and Chase, but should I even bother with them?

Also, any recommendations for investor friendly agents would be greatly appreciated!!

Thank you for reading through this post, and really appreciate all of you who participate in the BP forum and share your knowledge and information!  


 

[Jake Fugman]

@JR Dadivas  Welcome!! Step #1 should definitely be confirming your budget/financing based on your investment goals and current cash/income situation.  If that means getting an intro through an investor friendly agent then of course you can speak with agent first.  Having even a slightly more narrowed budget and strategy will enable an agent to better advise you early on VS having too many vague conversations on how best to get started.  

Some advice for anyone looking to leverage FHA is to remember that the "Self Sufficiency Test" (for 3+ units) will typically mean that a property must loosely already meet the "1% rule" or the numbers simply wont work for the underwriter. Make sure you inquire with you lender for more details so you dont waste too much time looking buildings that may meet your cash flow criteria but wont qualify for a loan. Often this de-rails any properties in B class or higher neighborhoods due to prices simply being too high. You are already on the right track look in the fringe west, NW, and SW areas where you can still find buildings around the $100-125k/unit mark (depending on condition).