All Forum Posts by: Ben Trageser

 80/10/10 is called a piggyback loan. 10% down 80% loan and an additional 10% loan whose rate is 2 point above current rate I believe. My issue with the 20% down is the houses I am looking at are a little north of $1 million (normal in this area) and I want to have some cash to make improvements so it's hard to come up with the 20%

 Most lenders would not be able to consider that. Depends on town law but it at least has to be zoned in a multi family area.

The lender I am currently using for financing says that he needs 30% down for a conventional loan on a triplex. Would be doing a 80/10/10 on a conventional for a duplex. Is anyone aware of different financing available for triplex or a way around this besides FHA?

Does anyone have a recommendation for a template for putting together a contract with a business partner regarding a multi-family property? Thank you in advance!

@Caroline Gerardo What do you mean by your third point? Can't take vesting into LLC? The third floor unit has comps listed on the street very similar in MLS (non-legal units). Lender was saying how appraiser would see these and could be considered in loan. Is that incorrect? I may be misunderstanding.

@Jonathan Greene Thanks Jonathan! Lender was stating how could go Sprouts or Angel Oak route and they could potentially provide around a 4.5% rate. If I could get this rate and no PMI then the cash flow really works.

Have an opportunity to purchase my first multi-family property off-market in a highly sought after area in northern New Jersey. 

Property is a legal two family property with a third floor "border" apartment. 2 units are 3 BR 1 Bath and top floor is 1 BR 1 Bath.

Price for property is $900k. Rents are a little under market at $2,850, $2,850 and $1,300. Property taxes are $22,500 a year.

I am potentially looking to go into the deal with a partner and owner occupy both legal units while renting out the third border apartment. Would be looking to put 5% to 10% max down on property. My vision for property for both business partner and I would be to live there for 3 or so years and then rent out property full time. With my calculation, property would be net zero for cash flow and then flowing cash in 2nd year. I have no problem with this as I am currently renting and would rather be gaining equity than paying rent.

My question is regarding financing. It would be considered a "jumbo" loan because high amount. Conventional loan is looking for 15% down which leaves FHA route. Conventional requires the 15% because I exceed income threshold. FHA I can put less down but the PMI is killer. PMI for loan that amount would be around 1% (approx. $700 a month). That leaves a few option. 1) Go piggyback loan route and have 15% to 20% equity upfront 2) Go private financing route. Pay a higher interest fee but not deal with PMI. 3) Parents have offered to provide loan to me of $100k at approx 2% interest but then in turn gift me the interest every year (making it a 0% interest loan). I could put that into the down payment and then lessen PMI. In essence it would be a piggyback loan with a private lender for "second" mortgage.

Reason I want to go into property with partner is due to better/qualifying for financing on property this large and owner occupy both legal units.

Any thoughts?

Hey - I am curious if the below wording in legal for the state of New Jersey for a multi-family rental property lease agreement. If not, what revisions would you propose? The last sentence does not sit well with me and I am curious as to the legality. Would it make sense to add a sentence which indicates that the tenant is legally responsible for loss, injury, damage up to the amount's of Tenant's liability insurance and secondly the Landlord's insurance?

"Landlord shall not be liable for any damage or injury of or to the Tenant, Tenant's family, guests, invitees, agents or employees or to any person entering the premises or the building of which the Premises are a part or to goods or equipment, or in the structure or equipment of the structure of which the Premises are a part, and Tenant hereby agrees to indemnify, defend and hold Landlord harmless from any and all claims or assertions of any nature."

I've been researching and think the answer is no but is there anyway to get a 3.5% to 5% down payment on a three family home?

The property that I would be purchasing would potentially be around $700k in northern New Jersey. Based on comp rents on the market, I feel that the rent is extremely low for what it could be. There may be some updates needed to reach out comps but here is what I have.

Unit 1 $1,700 with potential to reach $2,500

Unit 2 $1,600 with potential to reach $2,500

Unit 3 $1,300 with potential to reach $1,750

I would want to put down a lower down payment to save cash to make potential upgrades. The question is, is there any way which I could get around the 20% down needed? I don't fall in a low income bracket so I wouldn't qualify for that. I've thought about other means of financing and would love some opinions.

I have potentially thought about going in on this with a partner and potentially by myself. Even going in with a partner and occupying two of the units, I still couldn't qualify for the 3.5% down right since one of the units is being rented out?