All Forum Posts by: Benjamin Morris

 Are you sure you can't be approved for a four family that already has 2-3 tenants? Your income coupled with their prorated estimate should be sufficient if it's a quality property. An example in the CT area, you can get four families between $120k-$190k bringing in $600-950/month per unit (1br =~$600) (3br =~$950). 

There is a property I found that the bank would loan me solely on the properties income and no consideration required on my income - based on rent history. [$3350/mo rent with purchase price of $130k]. <- C- neighborhood. 

Try and find an escrow account, maybe ask your attorney who they use.  You want to be able to withdraw without their written/present consent to do repairs when they move out. 

Wait, am I getting this correctly? I could/should have set up my LLC through Delaware? Anyone care to explain the benefits of this arrangement?

New London County isn't too hot for multi families. After paying taxes and insurance there is next to nothing left. Before even touching on capex and debt servicing...I've been looking at the ones on the market and they have all been neglected for repairs for years. 

@Kyle Penland I got the property at a steal for $70k. Currently living there and renting 4 of the bedrooms; I just feel there is that untapped potential in the property. Instinctively I feel that I should make it a 4-family for an easier sale down the road, and if I can do that for under $150k - this was a better outcome than buying a 4-family already on the market. I like to hold my properties, so if 8-plex is allowable, I feel its a more profitable end goal. (Especially since there is little return on having larger units). 

 My thoughts are each bedroom can reasonably fetch $500 each - with all utilities included. If I break out out into 2 bedroom units, they can get ~$850+ each without paying for any of their utilities. 

HUD's website references "1 year" being the minimum for being owner occupant on a FHA Loan; sure its a different department; but its the most straightforward answer I've read. The IRS believes in your 51%/49% argument (for stating principal residence), at the same point; if you stay at a property for 14 days* or more it can now be deemed your personal residence.

The Short Answer: I don't believe there is an official posting of the guideline; 

Is two weeks a reasonable amount of time to not live in the principal residence and still be owner occupied? Yes. 

Is six weeks reasonable? Its probably pushing it. If you are renting short term for those six weeks I'm sure you could argue it being vacation (should an issue arise). If you own the property, and have your mailing address / drivers license etc swapped to that other address for the duration; then it is cause for concern in my opinion. 

Right now I have a "6,000" sqft property. It is grandfathered in as a boarding house; I have no experience with re-zoning a property. What is the likelihood of a zoning committee allowing a change of use to a 8-plex (or more)? Is it standard to have to do 100% of the work right off the bat? Or can I do it in phases? I would love to convert this property into 1BR/2BR units. I'm not too keen on house hacking to 8 random people! Any insights on prior experiences are appreciated! 

My opinion is a little different than most everyone here. 

I would either:

a) buy a SFR and house hack (likely to spend less than $850/month after rental income) I did this for my first property and was living rent/expense free for a couple of years while there (I house hack it still and make money on it each month.)

or

b) buy a 2-4 unit that nets a profit even with you living in a unit. 

Run the numbers on any potential properties though. I feel like you can probably get better returns owning (vs cc debt) if the end scenario is you have $850/month to put towards debt relief. 

Most loan officers look for 2 years full time employment and/or an associates degree in a specialized field. If you don't have either of those, its not entirely a worthless case. Try talking with a loan officer and seeing what they suggest.