All Forum Posts by: Laura Shinkle

You can only have on FHA loan, that's correct. That said, it's not the only loan, nor is it always the best loan. As long as your credit and DTI are good, you can qualify for a 5% downpayment conventional loan.

Questions to ask (since real estate is personal and what I would do is not necessarily what you would do)

1. Are you intending to keep this property long term or sell in the next few years? If you're intending to sell in the next few years, then you may want to stay in the home for at least 2 years to prevent capital gains taxes. And if you're not sure, stay to the 2 years to give yourself that flexibility in case something happens and you need to sell. 

2. What's the cost of refinancing the loan? If you've been in the home for 17 months, I'm guessing you have a killer interest rate compared to what rates are now. (in the 3's?). If you refinance, you'll be paying a LOT more in interest, and closing costs, just to be able to use an FHA loan again?...

3. What are the prices of similar homes you'd be buying now? Do you have 5% down in order to be able to purchase with a conventional? Are your credit scores great? DTI low? What can you do to prepare so that you get as great a rate as possible?

Bottom line, to answer your question, refinancing is the only way to get out of the FHA loan. That said, talk to a lender, run the numbers, because I bet it doesn't make sense.

I agree it's a great strategy. That said, there are some problems that can arise. 

1. The property has to appraise for that higher value. Especially in markets that are still growing and competitive, this may not be an option. If you ask for it up front and the property DOESN'T appraise for the contract value, then the seller's first response is to lower the price but take away those closing costs. And if you're counting on the appraisal to be higher, and it doesn't, are you now in trouble? Don't count on it, but definitely worth a try!

2. There are limits to what a seller can contribute to your purchase. For example, they can't pay your down payment. It can only be used for closing costs. Also, it depends on how much you put in a down payment as to how much you can get in contributions. If you're buying an investment property, 2% of the purchase price is max, no matter what. Owner occupied loans, <5% downpayment, 3% is the max. 5-10%, 6% is the max, etc. Definitely check with your lender that they can use whatever you're negotiating so you aren't left with too much money and no where to put it. 

3. Asking for it up front can make repair requests challenging (at least in NC and depending on the situation). Most sellers want to give a credit at closing rather than repair the home. If you already have closing costs negotiated up front, you may not be able to that, and then the seller simply doesn't do anything. 

On the pro side, you can use those seller closing costs contributions to do interest rate buy down programs as well (owner occupied only I believe). You can only use seller funds for those 3-2-1, 2-1, 1-0 buy down programs. 

At the end of the day, it is definitely a great strategy to keep more money in your pocket and/or save you money in the first few years on interest. Make sure you talk to your Realtor about the pros/cons and how to best move forward!

@Mykhailo Strelchenko love that you're thinking about this at a young age and willing to move in order to achieve your goals!

I'm not an expert in any market but my own (Charlotte,NC which I think should be on your list ;) That said, from what I understand about the. AZ markets is that they are much more of a rollercoaster than elsewhere. Phoenix is known for big swings in prices when economic factors hit. I also don't think Vegas has the appeal for people to live there, but I could be wrong. 

To narrow down your search, take a look at average purchase prices in those areas to see if your budget would work. I'd be surprised if you could find a big enough home to househack in some of those areas for under $400k. And I don't trust Texas' power grid after the last couple of years. 

Question to also ask yourself is where will you be happy? You don't want to be miserable with where you're choosing to grow your portfolio, and many of these places have very different climates and very different vibes (ie things to do, culture, etc). 

I may be partial, but I think Charlotte is a great bet. We are one of the more affordable growing cities. It's possible to get a 4 bedroom home under $400k. There is lots of growth in the Charlotte area, and Charlotte city counsel is putting an emphasis on making more dense housing a possibility, and getting our public transportation system more robust. Let me know if you want to learn more about CLT!

@Austin Ries search for Realtors, Charlotte NC and I'm sure a ton will pop up. Also, if you read a lot of the forums/posts about whatever real estate strategy you're trying to accomplish (long term rental, STR, flips, etc) you'll likely see Realtors commenting. Read some, find one that speaks to you and give them a call.

There's a lot of Realtors out there, and not all are good at all types of investing or skill level. I'd also recommend working with one, not several. Not sure if that was your plan, but since you asked for 'some real estate agents' I thought I'd mention it. Good Realtors will look for loyalty in their clients, quality over quantity. 

 So it sounds like you're actually wanting to BUILD a new construction multifamily property? That's a different equation. 

The median lot size is .3 acres for multifamily properties. What the land cost, that would definitley be a deep dive into those specific properties. It also varies widely based on lot size, cleared vs forested, sewer/water/utilities available vs not, and location, etc. Also, making sure multifamily properties are allowed via zoning. Feel free to DM me if you want more specifics. 

As always, go back to your goal. Ask yourself some questions about yourself and what you're trying to accomplish: 

1. Is this your first house hack and you're intending to 'rinse and repeat' in a year? If so, will you be able to save up enough cash for another downpayment in a year, or no?

2. If you're renting it out in a year, is that long term, mid term or short term rental? Will it cash flow with a lower down payment? Can you change strategies to get it to cash flow (instead of a long term tenant, do a STR or mid term rental)?

3. What's your risk tolerance? And be honest with yourself. The higher the downpayment, the lower your mortgage and the less you'll NEED the renter but also (presumably) the lower your reserves will be. The lower the downpayment, the better CoC return, but the higher your mortgage payment and the more you'll NEED a renter sooner. BUT you'll have more in reserves to give you buffer to find a good quality tenant.

4. Talk to a lender about FHA vs Conventional. I haven't seen many people that FHA would benefit unless you're a first time buyer with low credit and higher DTI. That doesn't sound like you. FHA isn't quite the hero loan that I think everyone makes it out to be (IMO). Talking to a lender will help you figure out what monthly payment to expect with different down payments, which will also help you answer some of the questions above.

In the end, real estate is personal, so think about your specific situation, what your goals are, and go from there. 

Anyone on here can give you their two cents and what they would do. 

Hi @Sydney G.congrats on your upcoming relocation. I looked up some stats for you to get an idea of how common what you're looking for is and the price points. I'm looking in our MLS in the Charlotte area, both NC and SC.

In the last 12 months, there are 4 multifamily properties that are new construction in Charlotte. None in the Indian Land or Rock Hill areas. There were 429 multifamily properties in total during that time, but most of the concentration of properties like this are north of Charlotte, in Kannapolis, Concord, Lincolnton, Hickory, etc. So that's 0.9% of the already limited inventory. The ones that match your criteria are listed/sold at $735,000 on the low end and up to $1.5M. 

I love multifamily as much of the next gal. But just looking from a likelihood scenario, those are some rough numbers and is literally looking for a needle in a haystack. Doable, but tough and you would need to act very quickly if you saw something that matched your criteria. 

Happy to discuss more if you have questions on specific areas. 

 I don't blame you! I don't think I could convince my husband to share a living space either lol. Best of luck with your new adventure!

Definitely talk to lenders, be upfront about your situation, and see what you can do. It'll be a lot of talking, phone calls and document uploading, but that's how you'll find out definitively. 

A co borrower isn't a bad idea, but does take some of the autonomy out of owning the home, plus you have to find someone with good credit and income that would be willing to do so. That may hinder the co borrower from buying another home or getting loans. 

Also, I recently saw a lender that posted your commission can be used for certain things in purchasing a home, such as down payment. That may open up lending options if NFCU won't allow it. 

All this aside, talk to some lenders. That's your first step. Best of luck!

Honestly, tenant evictions need to be handled carefully. If the letter of the law isn't followed and your tenant knows more about the law than you do, then they can play the system. I would honestly recommend getting an attorney involved. Perhaps a letter from an attorney will be enough to get out. If it's not, you'll know you have an attorney that can handle it should more be required. AND you'll know it's being done the right way. 

And don't let this stop you from house hacking. It's a great investment strategy. Just make sure you have a written lease in place from the beginning, before anyone moves in.