All Forum Posts by: Jimmy Lieu

Hi Jimmy, 
I have some great contacts for you in Bend, OR and am well versed in the multifamily market here. I've helped several clients do the house-hack, check out the referral on my profile for a prime example of a client i helped house-hack a 4-plex and force appreciation of about $150,000. @Devin Creek is a great resource in the area for handyman and GC work too. 

I also helped @Frankie Lesowske take this approach as well. 

@James Walsh I work mostly with refinances but if I was doing it myself (going to start again later this year in PHX) I would shop lenders in your area and look for a conventional loan that will let you do a 3 to 5% down payment. With a conventional on a duplex you can borrow into the 650K range and it is still a conforming (not jumbo so better pricing/rates). You will have private mortgage insurance on the borrowed funds above 80% only and it can drop off without a refinance. 

ALSO most people dont know but an FHA loan has monthly Mortgage Insurance Premium (MIP) but they also charge a 1.75% insurance premium on the front of the loan. Lastly, rates with the FHA can be more than what a competitive lender will offer on a conventional loan

Only real time to do FHA is if your credit is under 640 but if that is the case you down payment would be better spent on fixing and building your credit and waiting to buy something till you get it fixed/improved.

I would leverage what you can to make your equity work for you...but make sure to underwrite it strictly and buy right. If you're buying it truly under market value, still have additional value add opportunities, and are in it for the long haul then I'd say go try putting as little down as possible via the FHA. Also, your lower downpayment I think will go further than a slight decrease in the interest rate.

@Jimmy Lieu

I don't think you are understanding. A second loan would mean a second lien. Its riskier for the lender and thus higher interest rate and tougher to get. Furthermore, you'd be paying for another loan as in fee to lender (they have to make money somehow) and another closing, for example. Also, why would they lend you another $20k on the property? Did you buy that much under the market that there is that much equity left to be loaned out (when considering LTV)? Conventional loans aren't going to consider a future apraissed value.

@Jimmy Lieu

The 203k and homestyle renovation loan are the final product.  They get you the acquisition money and the rehab money in one loan and are in the 3's for a 30 year fixed.  It's your best way to get the rehab financed over a long period of time.

Not sure about 5-10% interest rates. This isn't the 80's. FHA loans are in the 2's and 3's

Home Possible is for first time home buyers generally, but it doesn't have a rehab component.  With Home Possible, the borrowers' annual income cannot exceed 100 percent of the area median income (AMI) or a higher percentage in designated high-cost areas.
If you can do the Homestyle Renovation loan from Fannie Mae, it's a better deal than FHA just because of the mortgage insurance.

Don't be cowed by the paperwork on a 203K.  If you have a good lender, they can walk you through it.