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All Forum Posts by: Keith Mikkelson

Keith Mikkelson has started 3 posts and replied 7 times.

Post: Meter Requirements for FHA Duplex?

Keith MikkelsonPosted
  • Posts 7
  • Votes 6

I'm under contract for a duplex that is everything I'm looking for, but my real estate agent and I are somehow just realizing it only has 1 electric/water/gas meter for the two units.

My real estate agent is firmly under the impression that FHA 3-4 unit multi-families require separate metering (I'm also unable to confirm on this front) but she is unsure about duplexes.

Is separate metering a legal requirement to purchase a duplex with an FHA loan? Anything you guys can do to provide some insight or point me in the right direction would be greatly appreciated!

Thanks,

Keith

@Matt Devincenzo @Eliott Elias @Michael Ohren @Jay Hinrichs @Jeremy H. @Carlos Ptriawan @Account Closed

Thank you all for weighing in here - general consensus seems to be that while my loan officer could have probably been pitching in more, I shouldve been stepping up more myself.  That combo of efforts is yielding better results, and I'm glad I checked in with you guys.

First time buyer here - looking to figure out if my expectations are realistic. I'm looking to house hack a single-family or duplex, occupy for 1 year per FHA loan rule, and ideally exit after year 1 with a cash-flowing property.

In my mind, before I consider anything else, I want to know what the total monthly payment would be all-in, and the expected rents to be received from the unit(s). My loan officer tells me payment calcs should be left to him due to rate fluctuations and nuances in taxes across different locations.

Is it too much to ask my loan officer and real estate agent to provide an estimated payment and rent amounts up front? Since cashflow is the ONLY must-have on my list, it doesn't make any sense to me that we'd run around town looking at properties without having an understanding on these two fundamental numbers, but it seems my agent wants to do exactly that. Is this something I can expect my agent and loan officer to do for me? Or am I way off base here?


Hi All!

I'd been making a plan to execute my first BRRR a year or two from now elsewhere, but without getting into it, life happened, and an opportunity arose to buy my first property in SLC! Things are moving pretty quick and I'm a bit overwhelmed with how much education on the SLC market I have to catch up on, so I apologize for this post jumping around a bit.
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As a skier, I'm particularly interested in southeast SLC - somewhere close enough to jump on to 210 with ease. Ideally I'd be looking at a multi-family with 3-4 units, that's rentable as-is, but has DIY-able improvements left on the table(i.e. don't want to be on the receiving end of somebody's flip).


My assumptions are as follows:

1.) at a glance, properties look like they're definitely cash flowing in southeast SLC. Agree? disagree? dependent on units?

2.) I don't know a soul in SLC... but my friends that are house-hunting elsewhere tell me its a GRIND trying to secure a deal on an FHA loan(I'm looking to throw as little money down as possible, so FHA 3% would be ideal). I'm assuming the same goes for SLC?

3.) The best time to buy in most places seems like summer.  I live in Seattle right now, and I love the summers here. If buying a place in SLC is the goal, it seems like a bad idea to try to hold out until late summer or fall... do you agree? disagree?

Side note: I haven't gone through the loan approval process in SLC yet, but lets call my loan approval amount 600k. It seems like this keeps me in the 2-unit range(3 if I'm very lucky).. would love to get my hands on a 3/4-unit. My girlfriend and I are definitely getting married, and she's very onboard with BRRR'ing ourselves out of our 9 to 5's... ignoring the whole 'investing with a significant other that you're not married to yet is risky' thing... if you were me, would you bring in her 2nd income to raise the loan approval amount in an effort to get a 3/4 unit? or would you keep only my name on the FHA, preserving her ability to secure her own FHA loan? The latter is kind of what I had my mind on, but am very open to others' perspectives.

depending on your answer to #2, any and all house-hunting advice welcome.

Thanks in advance!

-Keith

@Matt Donley you ever get an answer on this? I'm trying to figure out where the line on conventional 97/95 and 203k is at relates to home condition, would love to hear how this went for you and what else you may have learned over the last couple years.

@Adrian Chu well I'm glad you mentioned the 3-down conventionals - after some quick googling it looks like you are correct that this would be my best bet... regardless, you are right, certainly an uphill battle when facing competition without need for financing.  I don't disagree that the more bedrooms the better, but unfortunately I don't share the same salary as @Vasily R. so 550-600k is probably my ceiling. 


Vasily your rat-cage analogy feels accurate. I toured a lot of those 8 bedroom houses when i was looking for a place to rent 2 years ago... nobody WANTS to live in a situation like that, so my guess is you'd see a lot of turnover, which will cost you time. If you're up for it, it's probably worth the equity 8 people could pay off for you. Just not a very calm living situation.

As for what's required to seek out a place that's distressed with heavy upside post-rehab... Driving around target neighborhoods, drafting up a list seems like the move. Once you have your list, direct mail, finding bird dogs, tracking down owners of unlisted houses and pitching them... these are strategies I'm only just learning about but things along those lines seem like the play for those in our bucket.

I'm upstream of you research-wise, but I've been running into the same realization in my search for a single-family FHA house-hack. Haven't done any hard-pull pre-approvals yet, but I got in the weeds with a loan officer who was willing to provide me an estimate and it came in at $540,000. $520,000 loan amount comes out to roughly $2900-3100 in mortgage, home insurance, property tax, and MIP. A $540,000 house is a live-able, but needs-work 3-bedroom in lake city/shoreline, and it doesn't really matter if you keep going north for lower prices because the rent moves down with it(Numbers don't make sense until Everett, but like you, I'm not interested). Rooms in lake city/shoreline average $750. In the BEST case scenario, my girlfriend is willing to match what the tenants pay, and I'd have $2250/mo coming in... leaving me bleeding $750 +/- every month before surprise/expected expenses. Does not seem like a situation conducive to building up that next downpayment... plus when I leave, now there's a $1500 +/- hole that will leave me in the red, regardless of whether or not I can find a couple to fill it.

More research to be done, but my preliminary findings lead me to believe that, in Seattle, my only real route here is to be tenacious about seeking out a deal on a distressed 3-4 bedroom, and then go all-in trying to rehab it so I only have to eat one, maybe two full mortgage payments.  This brings me to a gray area I haven't been able clear up just yet... is there anywhere you can find exact criteria on what will/will not be approved for FHA Loans as it relates to the repairs that need to be done?  Don't mean to hijack Visaly's post, but since this consideration is very much in line with the situation he finds himself in, I'd appreciate it if any experienced folks could weigh in on that.