All Forum Posts by: Alex Doce

I'll say even at full price it would be a sweet deal. Assuming you are buying in the Columbus area, your PITI should to be below $1300/m, even at a high 5% interest rate for a low 600 FICO score, just to prove the point. Net PITI after IRS income tax deductions should be below $1000/m. If Congress extends the MIP/PMI deduction this year, it will be even lower. (See bottom of this comment) I

If AFTER buying your home you ever decide to rent both units, you should have a $500/m+ positive cashflow, before maintenance expenses andante after income tax deductions. As a friendly note, since the FBI monitors sites like this one, FHA defines a transaction to be fraudulent when the buyer may have had different intentions that those stated on the 1003, when first financing the property. If you are buying this unit as a primary residence, they require you to not have present intentions of renting both units in the future. :-)

For your future reference, unknown to many Loan Officers, the FHLMC Home Possible program from Freddie Mac allows you to buy 2-4 unit primary residences, with only 5% down and as low as a 620 FICO, or no score at all, (One unit w only 3%). They also allow a seller's credit or concession of up to 3% of the sales price to be used towards closing costs and prepaids. This is a pretty amazing product. On one unit properties, the full downpayment can come from a blood related family member, which includes uncles and cousins. On 2-4 units, a minimum contribution of 3% must come from your own funds. PMI under this program is substantially cheaper than others.

For tax year 2018, the PMI deduction is currently unavailable. At this time we don't know when, or if, Congress will approve this deduction for tax year 2018. If the deduction is approved after your file your 2018 return, you can file an amendment to claim the deduction. Alternatively, you can postpone filing your return until Congress definitively approves or denies the deduction for 2018.

However, once your adjusted gross income (AGI) exceeds $100,000 ($50,000 for married filing separately) the deduction is reduced.

The above tax assumptions are provided for reference only. A licensed tax consultant, tax lawyer or CPA, would be a more competent person to ask tax related questions to.

Best of lucks with your home purchase!

The short answer is; you will not be able to finance a multifamily with an FHA loan. The plan you describe is not smart at all, and you should scratch from your life the person that thought it was a good idea to engage in mortgage fraud, which is a crime punishable by up to 30 years in federal prison and a $1,000,000 fine. The ‘plan' you describe falls under Fraud for Profit. Fraud for Profit aims not to secure housing, but rather to misuse the mortgage lending process to steal cash and equity from lenders or homeowners. The FBI prioritizes Fraud for Profit cases.

When obtaining a mortgage loan via Fannie Mac, Freddie Mac or Ginnie Mae, the quasi-governmental agencies that buy most of the mortgage loans in America, you will be asked to state whether you are buying this new home as an owner occupied or as an investment property. Your answer is based on the intentions you have at the time of purchase, all the way to the closing. If you change your mind after closing and choose not to move to the new home, fraud would have not occurred. Because you have already announced the fact that you will not be moving to the new triplex, there would be fraud if you finance this home with FHA, or most any other conduit.

There are other reasons why you will not be able to obtain an FHA, or conventional loan here. To use rental income on a departing residence, the FHA 100 mile rule must be followed. Meaning that the new home must be at least 100 miles away from your departing home, otherwise you will need to carry both mortgage loan payments and be used against you in the DTI formula.

The other reason is that no Underwriter will ever believe that a couple living in a single family home, with the privacy benefits that it entails, would ever move to a 2-4 family home where they will have tenants all around them. Even if paying many times over the price for the multifamily than the value of your present one unit home.

The repercussions of any fraud, or of engaging in ‘non-permissible’ practices, can carry severe consequences, especially in the mortgage world that we live after the 2008 financial crash. The FBI is involved in ALL fraudulent cases that are reported by lenders. On this page (https://www.fbi.gov/investigate/white-collar-crime/mortgage-fraud/financial-institutionmortgage-fraud-news) you can see the amount of people going to jail weekly for similar situations as the one you described.

You do not want to commit fraud not just because you may get caught, but because is not the right thing to do. We all pay for these actions with higher rates, and in the form of loan programs getting more restrictive. Besides, you’d be a happier man with a clear conscience in knowing you have done the right thing by staying true to yourself not compromising your integrity, while remaining a free man, albeit with less properties. New doors will open for you in your life in ways you never thought where possible.

You are welcome Randy. Happy to help.

Randy, you can finance a 1-4 unit primary residence with 3.50% down with an FHA loan, with zero landlord experience. FHA allows for an up to 6% seller's concession to be applied towards closing costs and pre-paids. I routinely finance properties under this program where the seller contributes at least 2%. If you make less aggressive offers to purchase, or are willing to pay full asking price, or above asking price, you should be able to get 2-4% SCs easily. If you have a retirement plan, you may be able to borrow against it, at least 50% of its vested value, and without penalties, where slowly pay back yourself. The full down-payment can also be a gift from valid sources:

HI Amanda, if by 'wholesale' you mean low priced, I have a company that I have closed thousands of transactions with, that only charges me $395 and no other fees due to my volume, and responds to ALL communications in less than 4 business hours. Let me know if interested, and I will pass my wholesale discounted pricing to you.

Hello Randy-

The present housing situation your described would not qualify you for rental income to be used on DTI calculations when financing your next multifamily via a VA loan.

For landlord experience, you must have owned a multi-family home, had prior experience managing rental units or other background involving property maintenance/trades and rental or collections experience. If you can support the mortgage payment without the rental income this requirement is not needed.

The Florida Constitution requires that both spouses sign deeds and mortgages of homestead property, even if the title to the property is in one spouse alone.

Since you are buying a residence that will be owner occupied, and are seeking a mortgage to finance the purchase of that property, then your wife will be involved. Florida constitution provides that a married person may not encumber or alienatet (sell) his homestead property without the joinder of his/her spouse. Therefore, although you can buy the property in just your name, since the deed is recorded before the mortgage, and you are married, your spouse will have to join you in signing the mortgage INSTRUMENT, not to be confused with the mortgage loan. Even if you are getting the loan only in your name, which you can, and you are the only one signing the promissory note, the mortgage securing that promissory note, if it is a mortgage on your homestead, will have to also be signed by your wife. You can buy property for cash and not involve your wife. But if that property becomes your homestead, you cannot sell it or mortgage it without your wife's joinder in such action. She does not have to be on the deed. But she will have to execute the mortgage for you to use homestead property as collateral for a loan.

I am a Florida based lender, and have been originating residential loans for 30+ years. I look forward to connecting with you.

For references, Google my name.

You are normally better off using your RE equity. Selling triggers capital gains, loss of future rent, 3-6+ months of anxiety, 5-6% loss to sell with it an agent, and loss of future appreciation, defeating the purpose on why we normally buy investment properties to begin with. We may also not be in the best market to sell a condo in Miami right now, and likely will have to drop price until you find a buyer. If the property is not presently rented, you should look at HELOCs. By far the cheapest, easiest method with zero origination costs, and you pay interest only when used. Most lenders will not open HELOCs on investment properties, but if not rented presently, you should be able to get one. Otherwise, you can refinance to pull the cash out, provided your present mortgage rate is not too low.

I am a Miami based lender, and have been originating residential loans for 30+ years. I look forward to connecting. 

For references, Google my name.