Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
×
Try Pro Features for Free
Start your 7 day free trial. Pick markets, find deals, analyze and manage properties.
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Derek Brickley

Derek Brickley has started 6 posts and replied 467 times.

Post: Conventional vs. FHA for Househacking

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185

Love it!  All great information.  Thanks Brad!  Huge incentives too conventional with HomeReady/HomePossible for those under 80 AMI.  Never a better time to get into investing with a househack!

Post: Using rents as income for 5% down

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185

Are you currently renting a place now?  To use that rental income on this program, they will require 12 month verification of rent.  If you are living with no housing expense, then they would not be able to use that as income.

Post: Using rents as income for 5% down

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185

Hi Nolan!

Yes, we can use 75% of the rents to help qualify!  That's in most circumstances though.  Would this be a first time purchase?  Or do you currently own?

Post: FHA vs conventional loan

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185
Quote from @Ryan Thomson:

I would keep in mind that if you get a duplex, triplex, or quad you are going to have to put 15% down with a Conventional loan. 

With FHA you can get a duplex for 3.5-5% down. Do know that FHA has a self sufficiency test on triplex and fourplexes. In order to pass the self-sufficiency test, you'll need to prove that 75% of the rental income you're likely to receive will exceed the full monthly mortgage payment. If not, you will have to put 15-20% down for triplexes and fourplexes with FHA. FYI there is no self sufficiency test for a duplex.


 Hi Ryan!  

Like I mentioned above many people overlook the FreddieMac HomePossible product where you CAN go 5% down.  Income limits apply but may be a great option for some people.

Post: FHA vs conventional loan

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185
Quote from @Andrew Postell:

@Amy Lee I need to provide some clarification on your post if you don't mind.

1. Downpayment - there is no 5% downpayment using a conventional loan with a 2-4 unit property.  A few years back there was, but there hasn't been that option for a while now.  So your options using a conventional loan are 15% down with a duplex as your own primary home and 20% down with a 2-4 unit property. 

2. FHA Rules - now FHA has this rule called the "self-sufficiency" rule on 3-4 units properties. This rule basically states that the rents have to be OVER the mortgage payment. And since rates are so high right now, and properties are so expensive, satisfying the "self-sufficiency" rule is next to impossible. And that means no FHA loans on 3-4 unit properties right now. This is an economic environment problem that will not always be around but be aware of this. Keep in mind that this does not apply on duplexes.

I know that was a lot but feel free to ask anything additional.  Thanks!

Self sufficiency is true but if you qualify under the income limits then you can use a conventional HomePossible with 5% down on a duplex.

Post: FHA vs conventional loan

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185
Quote from @Amy Lee:

What would be the perks of using an FHA loan to househack on a multi family home (duplex-triplex)? There's the lower down payment but that makes your mortgage higher, you have to pay the the PMI (I forgot the term on FHA loans) for less than 20% down payment that lasts the life of the loan in my understanding, paperwork can be a lot I hear, and takes longer to close. So the only benefit is the lower down payment which you can do on a conventional loan also. Can someone educate me? Thank you!!

It will depend on your specific situation for sure, but they are very comparable loan products.  The conventional product has income limits, and FHA will be a much better option in general for those with lower credit scores.  With the conventional you would need 5% downpayment whereas FHA you can go 3.5%.   The benefit of going conventional if you qualify for a first time homebuyer product is that you can use that twice and then FHA after for three househacks without having to refinance.  For most people though, the FHA househack will make the most sense.

Post: House-Hacking FHA-Preapproval Calculator

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185
Quote from @David Rodriguez:

Very new to real estate and want to create actionable steps towards getting my first home. My goal is to house hack.

I want to figure out how much I can qualify for with an FHA pre-approval calculator. The calculators I have found do not seem to increase what I can afford as they do not consider house hacking rental income. Does anybody know a good tool for this?

Hey David!  I absolutely know a good tool: talk to a lender.  I know it sounds like a cheat answer, but as a lender it’s our job to tell you what you can qualify for and it’s also something you will need to do before you can convince an agent to show you properties (in most cases).  Talking to an investor friendly lender that understands your goals is important.  What state are you in?

Post: House Hack Without a Downpayment

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185

Most states will have down payment assistance and some lenders even have forgivable options!  Michigan (MSHDA) is a great option for those eligible and through us we offer to cover your entire downpayment up to 3.5% even on multifamily househacks!  Thank you for sharing your knowledge and educating people on options they might not know are even available to them!

Post: House Hacking Loan and Downpayment Options

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185

Very informative!! To those not in Colorado, most states have a downpayment assistance program!  In Michigan, homebuyers can be eligible for $10k in forgivable downpayment assistance which is amazing.  Even on multifamily properties there are programs lenders (our company included) who have downpayment assistance on multifamily properties.  It is possible to have the seller cover closing costs and be into a property for little to no money out of pocket!!

Post: Analyzing Properties For A Multi-Family House Hack

Derek Brickley
Posted
  • Lender
  • Ann Arbor, MI
  • Posts 486
  • Votes 185
Quote from @Mark Francour:

I am new to the Tampa area and looking to buy a small multi-family property to house hack this summer. I have begun analyzing properties in the Tampa, Clearwater, St. Pete area.

Being new to real estate and analyzing properties I feel like I am still "winging it." What advice would you give to someone that is starting their process of looking at properties? Would you use the BP Rental property Calculator, or create your own Excel Spreadsheet with formulas? Are there any specific expenses that are abnormally high or unique to the area?

Obviously, the current state of the market it has been tough to find many deals in the area. Is there cities/areas nearby that you would suggest to look at for properties? Areas that you see potential growth as the Tampa market expands?

Thank you!


I think the best thing you can do as a newer investor is use Biggerpockets calculators!  If you feel unsure, creating your own formulas in excel will only complicate things.   Find an investor friendly agent and lender that can help walk you through the process! Personal recommendation is Chris Mudloff for financing.