All Forum Posts by: Jose Aguilar

Some landlords will do this, they just want out. If you want the property bad enough you must accept the risk of dealing with these tenants. Since you're in California, you could have a tough time getting them out, though, so I'd personally just look for another property. No point in starting off with a headache like this....what if it cost you $40k just to get them out? There goes a lot of your profit, takes longer to make your return....

Hi Jose!

I love seeing other investors from Fresno on the platform! From my understanding, the residency requirement for a USDA is only one year. The rule is that you have to move into it within 60 days and live there for at least a year without moving out. You're not required to be there for the whole loan.

As for a loophole, the only one is not telling the lender or the USDA that you're not living there and hope that no one checks up on it. They almost never do and a lot of people take this risk. They usually just have the mortgage bill and tax bill still go to the property rather than their true mailing address. I, however, am not comfortable with that kind of risk and I personally don't recommend to any of my clients to do that. 

@Jose Aguilar

Is there a reason you can't use conventional? Is it just the downpayment? 

I'll tell you that the last 1.5 years in my local market getting an FHA loan accepted was not possible. When there were 15 offers on the table waiving all contingencies you went to the bottom of the list with an FHA loan.

Now things are different.....

You can absolutely get an FHA loan accepted.

The lender really doesn't have a say in what you decide to go with if you qualify. 

Are you working with an agent? Where are they in all of this? You don't have to contact the seller privately, you just present an offer and take it from there....

@Jose Aguilar- if you can qualify for both a FHA and a conv loan - opt for the conv loan for the following reasons 1) the down payment can be similar or less with a conv loan 2) with a conv loan you will have no upfront mtg ins premium to pay 3) with a conventional loan the monhtly mtg ins isnt permannent like it is with FHA 4) a seller is more apt to accept a conv offer over a FHA offer ....FHA pricing can be slightly better espeically if credit isnt great ...if you are targeting MF property - then FHA is likely the best program

You could also put down 5% through conventional financing. Hope this helps.

It seems like the extra lender requirements would help you avoid a "Donkey" of a house, and be easier, and less costly (fixup and ongoing R & M timing) to to start to turn a profit on it as a landlord aka less likely to fall into foreclosure than a looser standards market down payment loan.

 Hey Jose! 

What drew you to FHA? I can agree that FHA appraisers are very strict and some sellers may have an issue with an FHA loan over a conventional loan offer.

But it really depends on your qualifications. If FHA is going to give you the lowest monthly payment and/or get your foot in the door into RE investing, why not go FHA?

I say talk to a few other mortgage brokers and see which one would provide you with the best experience, and the best loan for your situation