All Forum Posts by: Jason Maguire

ahhhhhh gotcha!! @David Zimmer, wasn't exactly sure since you had mentioned house hack.

For structuring the deal with your partner, i think that is something you need to discuss more in depth about. Whatever you do, just make sure you have some type of operating agreement in place so you both know the details of the investment & what to do if there are any issues down the line, or when payouts and all that good stuff occurs. Best of luck

Hey David,

I'd love for a LO or someone else to weigh in on this, but I'm almost positive what your trying to do is illegal? If you are obtaining an FHA or a standard primary conventional loan for a primary residence, they are not to be structured like an investment property would & the bank would want to know that it's not an investment property.

Hypothetically, the partner could "gift" you the money in the shadows, but as i just said, you're technically buying a duplex with primary residence mortgage with better rates, down payment options, ability to house hack & i think what you are doing may constitute as fraud.

Definitely may want to check with a few other folks and go from there. 

Hey @Ben S.

I've unfortunately been in a similar situation with one of my boilers just last winter. Had a 5-year-old boiler that was relatively brand new, and the pilot light kept randomly blowing out in the middle of the night. Got like 5 calls over the course of 15 days that there was no heat. Would go over re-light it and it would then work fine. Had 4 different HVAC companies over who replaced the gas valve, cleaned the boiler, replaced the pilot, and more, but the issue kept persisting.

I ended up just replacing the boiler as the "HVAC Professionals" couldn't figure it out and we couldn't keep going without heat & was worried if there would be complaints if it wasn't fixed. It was frustrating because it wasn't an old boiler and the only issue seemed to be the pilot which is a very quick light with a BIC Grill lighter. But at some point, tenants won't take a band aid fix or an "HVAC guy says there's nothing wrong with it" for an answer, especially if it keeps happening.

My question to you, do you have a string of texts/ emails or any communication with the tenant showing you were actively working the problem? I would think her complaint would be invalid if you were actively trying to solve the problem & have the communication with both the tenant and HVAC company to prove it? 

If that's the case, then to James's point, her "complaint" would be invalid, and you would think you'd be able to either evict or non-renew her lease at that point without any backlash. But from the original post it's hard to tell what he specific complaint actually was. Was it you didn't fix the heat in a timely manner, or was it that the room doesn't stay at a set temp? Only reason i ask, is I've never heard of a heating system turning off because there is a space heater next to it.

@Jay Hurst, @Luis Somoza- Seriously, thank you both for your details responses and better insight into the lending world!!

Realistically, from the sounds of what you are both saying, if the LO isn't familiar with the home possible loan or other options, then trying to do a FHA may be the best route forward. With that being said, there could be further challenges as it will have to pass a self-sufficiency test. But i guess the good thing is MFH units have been sitting on the market longer & i feel like houses in my area could pass this test. So more to come!

& last stupid question as i see it on the FHA website. I can put more than 3.5% down in order to put the mortgage #'s/ self test into a better spot right? ideally would still like to put 6-7% down.

My two other loans i have out are standard 20% investment loans, so i have not had to traverse the road of obtaining a FHA loan or anything like that. Thanks again for the help.

Jason

@Jay Hurst Hi Jay, thanks for the insight & the direct links. They were extremely helpful! after looking, I make less than 80% of the median income which is $84,500 for the county I am in. It's weird because he clearly saw my bank statements & knew I made less than that & also didn't mention income being too high as a reason for not qualifying.

You mention, if your income is lower than the 80%, there is still income requirements? can you elaborate a little further on that? Based on the requirements listed above, I should be able to qualify for as little as 5% down?

The lender did mention a portfolio loan of 5% down for duplexes only, but i didn't get into it further with them as I am specifically looking for a 4 unit. Totally agree the FHA is a route and could be tough. Didn't want PMI the life of the loan & wanted to potentially put 7% down so was looking to stay conventional.

Thank you for the help!

Jason
 

Hi BP Team,

I've been looking to move out of my current house (SFH) and am looking to buy a 4 unit that I intend to live in for the next few years. My plan was to utilize a primary residence conventional loan & put between 5%-10% down in total.

I have been trying to get pre-qualified over the past week & have been running into some issues i was hoping for any expert or loan officer can shed some light on the below:

Long story short, when trying to get pre-qualified, my local credit union pretty much said that I would have to put 20% down & would not be able to put 5 % down on another primary residence. To sum it up in quotations this is what the loan officer said, " We would have to establish your motivation to move out of a current house as your primary, & into a bigger house. The reason is people will say they are going to live in it for better rates and terms and then never move in & make it an investment property, so we are required to document why you are moving. Even as a primary residence, the minimum down payment would still be 20%"

So that being said above... is this guy full of crap? I get the bank wanting to do their due diligence to ensure you are going to live there, but him saying at the end that 20% down is still required seems like total BS as i know you do not need 20% down for a primary residence. When asking him if this was Freddie Mae/ Fannie Mac guidelines, he said "yes" which didn't seem accurate.

I was also under the impression that a lot of these loans are based on "intent"- meaning, if i am under contract & something happens to not allow me to live there anymore (breakup, moving, new job, can't afford, etc), then i wouldn't be penalized. That is not the case here, I just thought it was weird that he's saying it's 20% down for any primary residence.

Looking for any thoughts on this & if anyone knows of a good lender based out of NY, let me know!!

Thank you!

Jason

@Mike S. just curious as to why you would use a warranty deed instead of a quitclaim? 

If you are quitclaiming the deed to an LLC from yourself as the owner, wouldn't you already know that you own the clear title & know that there were no issues when you bought the place? From my knowledge, the warranty deed is different in the sense that you have to make the guarantee as the seller that you own the clear title.

Just not sure why you would need to prove the title to yourself if you are "selling" the house to yourself, when you had to go through those hoops to initially buy the property & would of know the title was clear. Maybe i am missing something?

I prefer multi-family as i do believe they are easier management wise & having everything central at one location (one roof, not four, etc)- but i think @Luka Milicevic makes some very valid points about SFH.

Usually, lot less turnover & tenants seem to generally take care of the properties better, ultimately keeping your expenses lower than maybe a Quadplex. Kind of a toss up and up to one's preference! Solid thread.

Love the cig hanging out of his mouth too lmao

@Gabriel Latorre - so let me get this straight. You say you are confused about the data I provided. I provide the data for you from a Gov't website & then you respond without acknowledging any of the facts & say " How is the census collected"... like come on man.... just admit your initial assumptions & opinions were very far off.

I'm guessing you are questioning 2020 data collection due to COVID. Still has nothing to do with the numbers from 2010-2020.