All Forum Posts by: Jesse Byrer

I want to share this program with the group for those that are not aware of it. Freddie Mac has a program that allows only 5% down on 2-4 units. This is a huge opportunity for savvy home buyers because you can get into a larger building (2-4 units) with less money down. You might be asking yourself, why not FHA.. it only asks for 3.5% down. That's true, but the loan limits are lower for FHA, the MI is higher and is there for life if you only put down 3.5%. Not to mention, FHA has a self-sufficiency test you must pass on a 3-4 unit. This can be very difficult to pass in states with high property taxes... not to mention the current high rate and high-priced housing market we're experiencing. I'm a firm believer that everyone should have an investor mindset and this product really helps those wanting to get in the RE Investing Game! While this is only for owner occupants the borrower can get gift funds from a parent (must have 3% of their own funds). Think RE Investors wanting to help getting their kids get off to a great start:-) FYI, we also offer this for renovation loans as well so I will be doing a similar post under the BRRRR Group. Good luck to all!

@Jacob Gardner - I will confirm that you use 75% of fair market value for all units for the SST. You only use 75% of fair market rents for your non-occupied units when calculating the rental income you can use as qualifying income for the loan. 

@Jose Aguilar Sorry moving too fast... PITI is Principal, Interest, Taxes and Insurance. It's your full housing payment.

I'm looking to network with agents and contractors that do larger renovation project that have a history doing 2-4 units. I specialize in renovation lending and looking to collaborate with agents & contractors that educate their clients on house hacking. I think there is a huge opportunity in the city around the ADU Pilot program and want to network with individuals that have similar interests. I'm not a newbie.. did almost 300 units in 2021. Only mention so you know this isn't a plea to get business. Truly looking to network with like minded people who want to help clients build wealth through real estate.

@Jose Aguilar house hacking isn't hard to get started. You have to figure out the numbers of the full housing payment (PITI) and then compare it against the rents in the area. If that cash flow makes sense then the next step would be to get Pre-Approved. This allow you to know that you can afford the property as well as get clear on how much cash you need to close as well as your real housing payments. There's plenty of on-line rates published, but many can be deceptive (charging points for lower rates). If you don't have assets keep in mind that you can get a "gift" from a family member to help cover the costs to buy. Would think the return on real estate will be the market right now. FHA offers the lowest down payment at only 3.5% and is very popular. If you qualify for a VA loan that would 0% down if you enough VA entitlement. Other than that Freddie Mac has a Home Possible loan that only requires 5% if you qualify. Long story short... there are many ways to get started with low down payment options. Just have to get clear on what you qualify for before you start shopping!

@John Warren My tenant ended saying she had an opportunity to move out so  I didn’t not pursue eviction. Her moving out had its own challenges. I needed to front money to get her out… moving costs and helping her with her new security deposit. I’m trying to not let my experience with her damper my outlook on future investments. I’ve learned a lot and will take steps during tenant screening and move quicker to get out when I see the early signs. 

@Adonis Yancey I apologize if I'm ready too much into the wording of your post, but you start of by saying which program is better for investors. To clarify, FHA is only for owner occupied borrowers. So, that would mean you plan on living in the property. In theory, you don't own other real estate so it would make sense to an underwriter. If that is the case, then house hack would lead me to believe you are looking at multi-family properties. FHA is the most common as it allows only 3.5% down... but once again you must live in the property. I would also, add that using the FHA 203K is a great way to get a better deal. This will allow you to create instant equity (in most cases) and the rental income you're looking for. The FHA 203K is not for everyone and has extra steps. Happy to give you details in wanted, but probably not for this post. Good luck!

I have heard that courts were backed up in hearing eviction cases because of the eviction moratorium. Does anyone one have now how long it is currently taking to get a case heard by a judge in Will County?

also, if anyone has a good eviction attorney (will county) please share contact info. 

@Zach Gulbransen There are a couple things to consider... the down payment/equity requirements vary depending on whether or not you live there. I would caution you that when you go to refinance to disclose your intent accurately because it could effect your future purchase. I will add a link to Fannie Mae Guidelines, but here is a quick overview. FHA is only owner occupant financing and it's 3.5% down. Fannie Mae (conv.) is 15% equity on a 2-unit (owner occupied) and 25% equity required to 3-4 units. If you are refinancing it as an investment property it would be 25% equity for 2-4 units. https://singlefamily.fanniemae...

@Kevin Jones that are some great points in the prior post, but one thing I wanted to mention was using equity in some of the properties to pay-off the outstanding loans of the other properties.  This assumes you have a fair amount of equity and smaller loan balances in others.  This is another way to possibly reduce the of financed properties you own.  Good luck!