All Forum Posts by: Grant Schroeder

@Matt Parker, @Oscar Cardenas is spot on.

1) You have to occupy wihtin 60 days of loan closing. Be careful with making sure the tenant in your unit is leaving, because once you close on the property, the tenant becomes your problem and your headache to get them removed.

2) Per SB608 you are restricted to 7% rent increase per year + CPI (for 2021 this is 2.2%) This is only going to get worse becuase of the state we live in. It was 10.3% in 2019 and 9.9% in 2019. Soon we will be below 7% altogether. https://www.multifamilynw.org/...  I would also talk with Andy Hahs from Bittner & Hahs Attorneys at Law. When I house hacked my first property, he proposed an agreement with the tenant on a new rent price upfront because the verbiage of SB608 is so poorly written by politicians. I would talk with him further on how to do this because I am not an attorney.

3) If you read the verbiage of SB608, you have some flexibility since you owner occupy as @Oscar Cardenas noted, but I would tread lightly here. Here is a link to SB608: https://olis.leg.state.or.us/l...

Cash for keys is never a bad last resort to avoid eviction!
If you have more questions about house hacking, property management, or the lending side of things, please do not hesitate to reach out!

Hello @Christi Lane, great question! What the lender you spoke with is talking about is called the self-sufficiency test where the other 3 units of your quad need to cover the entire PITI of your mortgage. It is one of the requirements for 3 & 4 unit properties on FHA loans. It is even harder to get these numbers to work on a triplex wiht only 2 units' rent. FHA requires us as lenders to use the lesser of current rents in the other 3 units vs. what the appraiser deems market. Many property owners who are selling their Small Multis do not have rents at market rent, so this can definitely hurt the property from passing the self-sufficiency test.
For a duplex with an FHA loan, you can put 3.5% down, but it does not need to meet a self-sufficiency test. This is the cleanest way to use the FHA loan with 3.5% down and not have to worry about FHA's self-sufficiency test.

For a conventional loan, you need 15% down on a duplex and 20% down on a 3-4 unit. There are also portfolio options with 10% down and no MI that you might want to explore if you have the funds available for your house hack.

Please let me know if you have further questions about the details of all this! I am glad to help.

Of course @Patrick McCandless! Technically, to stay above board you are not allowed to rent it out for the first year. If it is a 2-4 unit house hack or SFR + an ADU, that is a different story. I have a client who bought an SFR + ADU in San Diego, lives in the ADU and rents out the main house. No problem with that scenario at all since it is treated as a duplex from a lending perspective. My first house hack, I put 3% down on an SFR and rented out rooms since I was still bachelor at the time and it helped me get started in real estate. This is acceptable for a primary residence, but I still had to be living there the entire first year.

I have been with Academy for several year now, but have not met Marcus Watson before. Academy is a great company; I'm glad you were able to work with him in AZ! If you ever need anything in your current CA markets, please do not hesitate to reach out. I will follow this forum chain, I am curious to see how things turn out/what you decide with your property!

@Patrick McCandless great questions! You will need to live in the property for 1 year as your primary residence to stay above board. Just having mail sent there or living there 51% of the time, especially since this is on a public forum, would be committing mortgage fraud...not worth it. The rules are fairly black and white. Live there for a year as a primary, then you can move or do as you please as a STR.

@Jonathan Stone That's a great location! I have helped clients and stayed in condos personally with that view in rockaway Beach. Good luck with your STR!

Welcome to BP @Susan Reehill! Are you looking for a 2-4 unit in Tacoma for your first house hack? Or are you open to renting out rooms in a SFR?

@Chris Dimoff definitely check out Boise, Idaho Falls, and Spokane!

@Jonathan Avellaneda welcome to BP! Since Multis are so scarce right now, would you be open to purchasing a single family home with 3-5 rooms and rent out the rooms for your first house hack? The best thing to do right now is to get started with your first property and take advantage of all the appreciation we are seeing on the West Coast in the current market we are in. My 1st house hack was an SFR and my 2nd one was a duplex. Even if you buy an SFR to start, its a great way to build momentum and get started. Let me know if you have further questions on this. I am glad to help!

@Ryan A Rodriguez-Wiggins It always amazes me how quickly things change in this industry, especially in the lending guidelines! That is why it is always good to find a lender that knows the regs/guides and stays up to date on them as they are ever-changing month to month. That's another reason why I love this industry, there is always something new to learn!

Of course @Tyler OBrien! You are definitely best to stick with your current FHA numbers. If you do a rate/term refinance into a conventional loan, you do not have to stay in the property for more than 6 months before buying again. If you were to do a cash out refinance at primary residence interest rates, you would be required to stay in the property for an additional 12 months.

Also, even if you do not get to 80 LTV between market appreciation & forced appreciation, you could potentially go with Single Premium Mortgage Insurance and wrap it into the conventional loan so you do not have monthly MI when you move out and therefore will cash flow the property better.

Hope that helps!