All Forum Posts by: Jeff Shumway

You can certainly purchase multiple properties at once so long as the numbers work. I would recommend working with a lender licensed in all the states you are buying so you don't have to coordinate between lenders. It can get complicated really quickly to purchase multiple properties with different lenders. 

How far from your primary is it? There is no specific distance requirements from your primary residence but it will have to pass the smell test in underwriting. If you have an arduous commute from your primary to your work, it may make sense to do it as a second home. 

Yes, the HOA can definitely make your life miserable. Be sure to read the fine print. Whether or not they are a good investment will depend on your investment strategy. Condos tend to not appreciate as much over time as a single family home would, so if you're looking to take cash out of your property you may be better off with a single family home. Depending on the location, condos can be great for the short term rental game. Again, this depends on your HOA.

Hi Mooaz, it sounds like you are concerned with how to come up with the down payment for your second investment property after using your funds for the down payment on the first. Is that correct?

I'm sure you've seen posts on here for the BRRRR method- meaning you buy a property, force appreciation by upgrading/repairing the property and then do a cash out refinance on the property to get your money back out. It definitely takes some finesse and the "right deal" to make it work. The maximum loan you can take out on an investment property is usually around 75% of the value of the property so it is key to make sure the property value increases enough to get your money out. For example, if you are buying a 500K property, you would want the property to be worth probably around 650-700K after repair so you could get all your cash back out of the property and into your pocket to reinvest for the next one. It can be a little tougher at the higher price point which is why many investors focus on cheaper properties. It may make more sense to buy 4 properties all around 100K, force appreciation, and then refinance to get your money out so you then have 4 cash flowing rentals instead of one.

Don't be afraid to get creative for the source of the down payment for your properties. Chances are that an investment property will grow faster than a retirement account so it may make sense to try to take funds out of a retirement account (this will depend on the account). If you have any stocks of cryptocurrency, you could liquidate that as well for the down payment. Or you could always look for a partner on a deal. It's always better to have a small slice of the pie than no pie at all. 

It would not necessarily ruin your chance of purchasing a home on an FHA loan. It's a common myth that the FHA loan is for first time home-buyers only but this is not the case. The biggest thing would be your debt to income ratio. If you purchase an AirBnB you likely would not be able to use the income generated from the property to qualify for your 4plex until you have two years of tax returns showing the AirBnB income. However- you would be able to use the anticipated rental income from the 4plex to help you qualify so it may be moot. It just depends on the deal and whatever other monthly liabilities you have. FHA requires that any 3-4 unit you purchase must be self-sufficient, meaning that the anticipated rental income must cover the mortgage.

For a conventional loan you are allowed to have up to ten financed properties in your name. Certain lenders may have additional requirements as to how much financed properties they allow you to have. With as many properties as you have, it may be worth your while to look into debt service coverage ratio loans. These require much less documentation than your standard conventional loan since they do not use your personal income and generally have no restrictions when it comes to the number of financed properties you have etc. 

If you purchase a home as a primary residence, you usually must certify you intend to occupy the property for at least 12 months. However, if you have a life change (i.e. change in familial status, job, etc.) before the 12 months is up, it's usually no issue to move into a new primary residence. 

@Nick Louie best of luck to you! Feel free to DM me if you have any questions

The rules for the down payment on an FHA loan are pretty strict that you must have no intention of being repaid if you give her the down payment money. It must be a gift. I would also caution you to be careful on quit claiming the title into an LLC after closing. Usually this requires permission from the lender (if they allow it at all).

You can do an owner occupied duplex for 15% down but for a 3-4 unit, it's 25% down on a conventional loan. It used to be that you could purchase a 2-4 unit for lower down payments on the conventional Home Ready program but this is no longer the case. And of course, FHA is always an option for 3.5% down.