All Forum Posts by: Christopher Johanson

Sounds risky,

Also, I assume unless ALL that "private money" is gifted (which it probably isn't)... that there's surely a higher interest rate to be paid on the borrowed funds for the down payment. 

Shameless self bump.

Hypothetical Situation:

Between myself and my girlfriend (who are looking to buy a multi) we make about $60,000/yr before taxes. The rental income for the area we're looking at is around $950/unit. We could do a MassHousing loan in Massachusetts, or an FHA loan. Each has its benefits. MassHousing, I don't have to pay mortgage insurance, but with FHA I can use 85% of the market rent to qualify instead of the 50% of market rent from MassHousing.

THE NUMBERS

$60,000/yr Gross Income (Combined)

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$950 * 2 Units * 12 Months * 50% = $11,400/yr (MassHousing)

$60,000 + $11,400 = $71,400/yr (Assuming 50% can be used)

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$950 * 2 Units * 12 Months * 85%= $19,380 (FHA)

$60,000 + $19,380 = $79,380/yr (Assuming 85% can be used)

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We are both completely free and clear of any student debt, and/or credit card debt. The only debt we have between the two of us is a car payment that I make for $279/mo. My credit score is higher than hers by about 100 points (Lets call it 750 and 650) though due to something that was on her credit for about 4 years without her ever knowing about it.

Would that poorly affect our qualification to purchase? And with these numbers, what kind of price point should I be looking at. I'm 21 and she's 26. Yes, I'm starting early and with great intention.

End long post.

Hey Chris. Great Name!

I'm from Medfield, which is a suburb about 30 minutes out of Boston. I can tell you first hand, that if you're looking to start investing with rental property (buy and hold)... Boston is going to be a difficult place to do so. Down payment requirements on expensive properties lead to barriers to entry. It's hard to break into an expensive market. Head a bit west or towards the cape and you'll find some more affordable options. I'm currently looking at Worcester County

It refers to income of anybody who is on the application. For example, if you and a partner are applying together, and you both make 80,000/yr, you wouldn't qualify because you make too much. 

5% is totally doable

It's not something that investors can really take advantage of in the long run, because as far as I know it's only available for first time homebuyers. But it's a good start I think. There are limits though. Your annual income cannot exceed 81,000 for a single family home, or 121,000 for a Multi. I think.

Hello all, 

I've discovered there are slight variables regarding different financing options in my area. I'm looking to purchase in Worcester, MA... and ideally I would like to put a small down payment on, say, $250,000 (Triplex - Owner Occupied). 

It has come to my attention that although FHA loans are discussed frequently throughout the forums here, nobody seems to mention the various Homebuyer Assistance programs that are available depending on the state you live in. Here in Massachusetts, there is such thing as a MassHousing loan, which only requires 3% down (compared to FHA's 3.5% down). The rate is slightly higher, at around 5.15% APR, but it doesn't require mortgage insurance like an FHA loan would. So the PITI is actually lower than the comparable case with an FHA loan.

MassHousing loans will also allow you to account for 65% of *market rent* towards your mortgage loan qualification. (If rent grosses $1000/mo, then they will allow you to count $650/mo as "income" to qualify).

Am I missing something, or is it just a great option that HAPPENS to exist because I live here...?

Moving creates a new world of issues. Leaving behind work, family, and going to a place where (maybe) there's better markets for house hacking, but at the same time you aren't as familiar with those markets so it becomes a challenge

It's tough to say because ideally you would be looking for absentee owners on these properties with either direct mail OR driving for dollars. The problem is that most people who own a MFH (what i'm looking for) have no strong motivation to sell them because they likely have tenants etc. There is definitely a time and place to want to sell a MFH investment, but if they are also an investor and are selling, there's probably a good reason why.