House Hacking Partnerships

[Troy Williams]

Hello, I'm currently living overseas and am thinking of moving back to the states by the end of the year. I already co-own 6 units with conventional loans using 20%-25% down, but would like to try something a little more creative to sponsor my next investement. 

Considering two options:

1. House Hack on a two to four unit residential building, assuming it allows a low deposit FHA loan (3.5%) with a co-investor. My investment would be 30% of the downpayment, a committment to live in the complex for one to two years, plus I would manage all initial rehab work. Co-investor pays for rehab costs. I would receive 8% property management fee to take care of all issues while living there. Partner and I share equity 50/50.

2. House Hack on a much larger multifamily, 10-30 units with co-investor. My investment would be 10% of the downpayment, a committment to live in the complex for two years, plus I would manage all initial rehab work. Co-investor pays for rehab costs. I would receive 6% property management fee to take care of all issues while living there. Partner and I share equity 50/50.

Note: i have experience with construction, architectural drawings and city reviews.  I am flexible to live in either Texas, Florida or Colorado.

My questions about this idea...

1. If I were to find a partner to invest and use a conventional bank loan, would the bank and FHA allow both of us to be on the title, even if I was the only one living there?

2. Would the bank allow our combined income to determine debt/income ratio?

3. Does anyone reading this have experience with similar situation or have feedback on how to make this deal better?

Thx, 

Troy

[Curt Smith]

FHA was designed for occupants not groups of investors. No one's opinion is worth a penny. Call a bank's loan officer. They all do FHA.

FHA is so generous now, 3.5% down. Some states have first owner programs to cover more of the down.

Say a Quad is running $400k, $100k/door, then 3.5% is $14k.  Plus closing etc etc.   That's not much cash to get into an excellent investment situation where certainly 3 paying doors will certainly cover the mortgage plus some.

Call a loan officer, or better yet a broker, one who fronts for many lenders.