All Forum Posts by: Grant H.

 Thanks Nik. That’s really good advice regarding the offer. I’ve seen this on several other properties so I will definitely use this in the future. Thanks again

To start, I’m attempting to purchase my first multi family property. I found a duplex that was listed for $250k. The market has been extremely competitive in my city so I acted fast and offered $255k which the seller accepted. Due to the property being occupied, they would not show it or provide any information without an accepted contract. On the listing of the property, it did not disclose that it was section 8 housing and it also listed the rental income incorrectly (it was listed higher than the actual income). 

Moving on, I’ve spent about $1300 in different inspections - only to find out after these inspections that it was section 8 housing and that the actual income was lower than what I was told and what is listed on the listing. This was only found out after I was given copies of the leases. 

The home inspections turned up issues that the seller has not agreed to fix, which is going to cause me to terminate the contract (still in option period).

It’s not a lot of money to lose from inspections, but my offer would not have been $255k if I would have know this information beforehand. My number 1 rule has been trying to find a property that meets the 1% rule and after finding out the actual rental income, this rule doesn’t work anymore. 

Do I have any kind of legal basis to have my money refunded from the seller? Did the seller and sellers agent do anything incorrectly or did I just make mistakes?

 I saw the property yesterday and it’s actually in a better area than I thought. The numbers make sense and the building is in good condition. Only issue is that it’s been on the market for 5 days and already has multiple offers. Will find out soon if I get it. 

Thanks Jim. This is helpful advice. 

I am looking into a duplex in a major city in Texas that is listed for ~$300k and has total gross income of $3,100/month (so it meets the 1% rule). Tenants pay their own utilities, except owner covers water. Plan is to put 20% down and not to house hack it. At a 50% occupancy, the property still generates enough income to break-even on mortgage, taxes and insurance.

My biggest concern about this property is that it isn’t in the “best” part of town and I’m not very familiar with the insurance needed. How can I properly cover myself in the case that something drastic happens on my property? Is there a case that I could “never” actually be fully protected?

Also - I see multi family units being something I continue to purchase throughout my life. I have a goal of purchasing 3 within the next 12 months. I know that after a certain period of time, lenders will factor rental income into your back end debt-to-income ratio, but what happens if I max that out before hand? Is there a possibility of refinancing all the properties under a commercial loan to give myself more room to purchase rentals? 

@Chase Louderback thanks for the response. The exterior of the house is actually very nice - it's an older brick house and the roof is in good condition. The plumping in the house is new and it has the original hardwood floors, that appear to be in good condition and i would only have them re-finished. Other than that, the house is empty. It has no drywall and is 100% down to the studs. It has no appliances or anything else.

I have already talked to a decent amount of lenders due to me looking for typical 2-4 unit places, but I didnt think I would possibly transition to a 5+ reno project. Thanks agian for the advice.

I'm looking for some advice regarding the possible purchase of a permitted 4 unit property, but it needs an entire renovation. During the renovation, the plan is to add a 5th unit in the attic. How will this effect the loan? Does this change the requirements to that of a commercial loan since it would eventually be a 5+ property or can i still qualify for a conventional? I've also been told that I may not be able to get a conventional loan because the house is currently unhabitable. Is this true? If so, is my only option to get a hard money loan? I would need the loan for the property itself and also a construction loan, which I have read that you can often bundle. Any advice or direction would be great.

The goal is to flip after the house is renovated and filled with tenants.