All Forum Posts by: Matthew Kwan

House hacking with FHA is the ideal way with min down payment. However, anything above 3-4 units you would also need to consider passing the Self Sufficient Rule (SS Rule) where your projected gross market rental at 75% has to be greater or equal to your monthly PITI. The SS rule only applies to 3-4 units when using FHA but if it's single family or duplex, it will not trigger the rule. As for conventional for single family residence, you can go as low as 5% down. As for 2-4 units you would be expected 10-25% down depending on the amount of units. However, the mortgage insurance are usually lower than FHA. 

@Carlos Valencia @Albert Bui

It depends on the written contract between you and the PM. Some PM would that all the late fees as they are the ones chasing the tenants and doing all the heavy lifting @Carlos Valencia @Albert Bui

Short term rental allows you to have stability and less work in the long run, however you usually can't charge as much as short/mid term rentals. As for short term rental, the beauty of is that you can charge almost 3x the price especially during  peak seasons like summer or Christmas (depending on your location). However, you do have to put more money on decorations and making sure it is fully furnished. Also, you attentively have to micro manage the unit as the turnover rate is high when it comes to short term rental @Carlos Valencia @Albert Bui

I would consider Seattle to invest. As Seattle is the only city that allows you to build ADU (attached dwelling units) and DADU (detached accessory dwelling units) if the house of the land that you purchase has sufficient sqft. This will allow you to force appreciation of you land + create sweat equity. @Carlos Valencia @Albert Bui

 Yes thanks for the honesty @Carlos Valencia we need more "TBH" thoughts and comments especially during these times. @Albert Bui 

Do you consider buying as an investment or primary property. Usually starters would start off buying their 1st property as a primary residence as we call it "House Hack" where you live one of the rooms/units and rent the other vacated spot as it helps offset/lower your mortgage payment. In other words, what other way to start off your 1st property to learn and manage your property while living there. Usually lenders will offer competitive rates for primary as they encourage people to buy house at an affordable rates.

As for investment properties, typically it will require more down payment however you paying towards principal and you can rent the whole property to maximize your cash flow of that unit. The down side it that rates are usually higher than primary since the purpose of the purchase is to generate a business.

@Carlos Valencia @Albert Bui

Basically you are using money to buydown the current or whatever rate the borrower locked. Either you use your own cash to temporarily lower the rate at closing or request the seller to pay for you which is called seller concession.

1-1 Buydown expect 1.5% to be paid extra at closing of the loan amount 

2-1Buydown expect 2.3-2.5% to be paid extra at closing of the loan amount 

3-2-1 Buydown expect 4.3-4.5% to be paid extra at closing of the loan amount

@Carlos Valencia @Albert Bui

You can either take legal action against the tenant for violating the lease agreement or take all the security deposit from them. @Carlos Valencia @Albert Bui

What is your current rents right now? What are your anticipated rent after the cosmetic rehab? Will it be worth it? @Albert Bui

Hi Tiffany,

House hacking with FHA is the ideal way with min down payment. However, anything above 3-4 units you would also need to consider passing the Self Sufficient Rule (SS Rule) where your projected gross market rental at 75% has to be greater or equal to your monthly PITI. The SS rule only applies to 3-4 units when using FHA but if it's single family or duplex, it will not trigger the rule. As for conventional for single family residence, you can go as low as 5% down and house hack by the room. As for 2-4 units you would be expected 10-25% down depending on the amount of units. However, the mortgage insurance are usually lower than fha. 

As f

 @Albert Bui @Carlos Valencia