All Forum Posts by: Juan Maldonado

@Devin, I'm not sure how recent you want the deal to be or if you're looking for a serial house hacker, but my wife and I bought a duplex using the little-known FHA 203k Loan Program. This loan allows you to roll up most transaction fees and renovation costs and still be able to get in for as low as 3.5%. Several years ago in 2015, my wife and I purchased a duplex in Austin and still live on one side while renting out the other. The purchase price was $180k with a renovation cost of $70k. I would have to look through the HUD statement, but for the loan, we brought less than $12k to the closing table. After accounting for the neighbor's rent, our mortgage was around was like $750 or something. This could also be used for a 4 Plex as it is a residential product. Also in a market in Austin, more importantly for some folks struggling to meet the loan income requirements, the property's rental income counts, towards your personal income. So that really helps drive some of the Front End and Back End Debt to Income Ratios, allowing more folks to qualify.

There are some quirks to the FHA 203k Program I wish I knew and would love to share.

Juan

Originally posted by @Wade L.:

Originally posted by @Mike D.:

I've got a vacant apartment. I wonder if I should wait until this eviction ban is over with to rent it?

You might as well rent it - you're not making money if it's not rented.

 Correct, you can't predict the future. Just play your hand with the cards you see on the table. Not renting it is only guaranteeing you no rental income. Screen your tenant properly, if you get someone who is capable of working remotely, even better. 

@Austin Wingett, your on the right path. Look into a 203k Loan. Like someone above mentioned find a fixer upper. The nice thing about this loan is that its an FHA product so it apply to any residential property SFR- 4 unit. The 203k Loan is made specifically for properties that will need minor or even major updates. You get your construction costs rolled into he loan and can get in with as little as 3.5% down.

Purchased a duplex in Austin, TX three years ago for $185k out in about $70k into the renovation, the loan after all fees and costs was about $260ish and total out of pocket was like $10k. Obviously you have more equity than this, but if you are able to rehab and then get the property refinanced, you may be able to show you have built up over 20% equity and get out of mortgage insurance. 

@Austin Osier, hey Austin, if you used to work for Nexus. Send me a private message, would be more than happy to discuss further. I am no longer with the company either. 

Regardless if this is you or not, sounds like you are looking to Househack and have your tenant pay a portion of your mortgage. To be pre-approved I would start at a bank, one that you already have products with is a good start, another avenue is a mortgage broker, they can cast a wide net and because they don’t work at just one place they can get more options.

Depending your situation an FHA loan is a good option where you don't necessarily need to come in with the whole down payment yourself. If you like this idea and don't mind a little paperwork and can handle a fixer upper a FHA 203k loan is the way to go, you can borrow your rehab dollars and this applies to any single to 4 pled property. So let's say you buy a property for $100k and you want to put another $100k in rehab, then your 203k loan balance will be for $193k (200 minus your 3.5% down payment). Assuming you add value with your renovation you should be able to easily pull some equity in just a few years time.

Finally,since your already debating a duplex or triplex, go for a 4 Plex. Two reasons, firstly the management of a duplex or 4 plex is very similar, but you will get more rent money coming in. In a duplex if you live on one side and your tenant leaves or unit is vacant your carrying the whole mortgage. In a triplex or 4 plex, very unlikely all other three units will be vacant.

Then according to our 203k inspector ( one of the red tape hurdles on this loan) FHA typically doesn't like to see people moving from a duplex to a 4 plex. They like to see people move from a 4 plex, to triplex to duplex and finally a single family loan. The reasoning supposedly is that FHA is meant to help people attain the home ownership dream, not become an investment vehicle, so for them someone going from a 4 plex to a duplex means they are closer to the end goal of single family ownership.

Also remember that the rental income counts towards your income qualification, so if you think a 4 plex may be more difficult due to costs, its actually fairly similar. On the exit do have in mind that the buying pool for a duplex is going to be bigger, so if your thinking of selling in  short period of time, the extra rental income may not make sense if that is your strategy. 

Also I have a mortgage calculator that I had shared on BP previously that is set up for you to know how much you would qualify income wise, taking into account your front end and back end income ratio that your lenders would use, it also accounts for tenant income, if this is something you want send me a message. 

Hope this helps!

Hi Fred, No worries thanks for reconnecting. Do you do or know anyone who is picking up tax delincuent properties in Bexar or surrounding counties? That is something I am interested in learning a bit more about, after I take them down cash, you can help structure the note :) 

Anthony Reyes , as someone above mentioned house hacking is a fantastic way to get started. I would recommend that you start with a 4 plex if possible. For whatever reason FHA believes that moving down on the unit count means moving up in the world, so they are more lenient with people in a fourplex downsizing to a duplex, but will not allow you to go from an SFR to a dourplex, for whatever reason. So starting with a 4 plex will give you more flexibility when looking to move out to another property. This is what a lender told me when I wanted to go from my current duplex to a fourplex. Hope this helps

@Fred Ramos, This is a quick way to search what is on the market http://www.metrocuadrado.com/casas/venta/medellin/. This portal is owned by El Tiempo which is probably the largest news paper in Colombia. As for specific agents, I don't really have a contact. 

Saw your in San Antonio, what type of investments do you do there?

@Kris Miller if you want to try to find the cap rate in your area check out IRR.com they have market specific surveys by asset class so you can look up multifamily. The only problem with that is that they only track the largest metros.

Like someone suggested talking to a local commercial broker would be the fastest way, to locate one just see if anyone has a listing close to your property on loop net and go from there. 

@Juan Rango, If you are looking for well priced places in Pittsburgh, Dormont may be a good option. For whatever reason Dormont and Mt. Lebanon both "South Hills" neighborhoods, are not getting the same building and rent price hike frenzy that Shadyside, Strip District, Shadyside, Lawrenceville, East Liberty are getting. 

But for my money, this is the area that I would look in. I think you can still find quite a bit of value in the "Regent Square" area. It is going through an interesting shift, if you don't have kids you will find Wilkinsburg has good value propositions, but stay WEST of Penwood BLVD and South of Penn Ave. Here I think you should still be able to buy at around $45-50k per unit and the rents are going for about $650 for a 1 bedroom. 

@Carol Bloom sent you a private message.