All Forum Posts by: Michael Facchini

Correct, not an issue as long as we can explain what's going on and it's reasonable.  Hope that helps!

Appreciate the shout-out @Jonathan Klemm!  @Robert Galtman, happy to help.  Tell me more about what you're looking to do!

Welcome to BP @Michael Betancourt, glad to have you as a part of the community and please lean on all of us! There are 3 types of financing for this situation - FHA, Conventional, and then Portfolio loans. As @Brie Schmidt mentioned, FHA definitely has its benefits and place in the marketplace, but also comes with limitations.  Conventional allows the largest loan amounts and guidelines are a little looser vs FHA, but requires larger down payment.  Last but not least, portfolio options are fewer/further between out there in the marketplace, and are most niche-y, but often fill the gaps left by Conv and FHA.  

@Jerry Booker, as mentioned above, 203k, Conventional Homestyle/Choice reno options, and most any renovation loan is going to be nuanced and require a host of experienced and trustworthy people around you to guide you to the finish line, otherwise it can be a rough journey.  From the agent, to the lender, to the GC, your atty, insurance agent, etc., everyone on the team needs to be well-versed in the process and doing these transactions often.  I'd be happy to help connect you with some people if you like!

@Brendan M., FHA might be tough for you to qualify for due to a variety of reasons. Fortunately though, 5% down Conventional is possible and you bypass the Self-Sufficiency concern. That said, you are correct, less and less properties moving forward will cash-flow when house-hacking, namely at low down payments. The game is changing, and we're getting into more "realistic" times ahead....whereas the past was a gift, so to speak. Lack of inventory, higher (and more normal) rates, and the increase of house-hacking demand year over year - most properties in most cities simply won't cash-flow right away. This will be an adjustment for most everyone reading along on BP, but it was an inevitable reality that is now coming to fruition. Even large value-add rehab projects (for investors/developers such as myself) are becoming harder and harder to pencil out, given the cost of land and labor/materials. Going to be a long-play from here on out for most properties.

Thanks @Jonathan Klemm.  @Richard Young, these are great questions. There are some good physician loans that could fit your needs, but generally these are best for 2units. As you get into 3 and 4 units, FHA, Conventional, and some portfolio loan options should make more sense. The areas you identified are popular for house-hacking, for the most part - although West Loop and Logan likely won't be your spots as they're more expensive. You might expand your search a bit to near south side, like McKinley for instance, or up north into Albany, Portage, and Hermosa. Happy to help with your journey, so fire any questions at me!

Hi @John Huynh, the quick answer is that most origination charges are not necessarily a percentage of the loan amount, but instead a fixed fee.  Loans have a variety of fixed costs just to move paper around, check all the required boxes, pull various 3rd party reports, etc.  Now, some lenders do charge an origination fee that could be a percentage of the loan, which includes or is additional to their fixed origination fee.  You might also see a percentage fee on what is called a "Discount" fee/charge, which is when you're paying extra upfront to buy down the rate below the market (in order to save more over time).  Happy to answer any questions on all of the above and more!

Hi @Joshua Branovsky, welcome to the BP community and congrats on getting the ball rolling with this first house-hack!  To your question on the illegal unit, there are ways to navigate that, with some lenders being more comfortable and experienced on it, whereas most are going to stumble on it.  A lender well-versed on multi-unit financing will know the right questions to ask and how to get this done, with there being a variety of routes that would be considered.  I know that's vague, but it really does matter on the scenario and is thus case-by-case.  

Hi @Tayo O., unfortunately down payment assistance programs are very limited for 3+ unit transactions, but like you said you should be eligible for FHA or a low down Conventional program. If I can be of any further guidance, don't hesitate to reach out!

@Steven Caldwell, I can speak for hours on this....but I'll try to keep this brief so my fingers don't fall off.  As @Jonathan Klemm stated, this time around is different in many ways from 2008.  One main difference of 2008 was an abundance of inventory (more supply vs demand), and of course riskier mortgage products in a less regulated market.  I do feel appreciation in various areas of the country has soared a bit quick over the last 18 months, and we should see that start to taper off, however I am not expecting a crash.  Rising interest rates will slow down this hot market, but not turn it off.  Demand is expected to continue to rise, with the largest generation of first-time buyers continuing to enter the market for years to come, yet inventory will not be keeping up with that demand.  Labor (contractors) remains a serious issue, materials remain inflated, and land is at a premium - therefore, builders won't be able to fill this gap anytime soon, especially the lower price-points.  Furthermore, in major cities like Chicago, there simply aren't a lot of places to build and add units other than going up into the sky or sprawling out past the further-reaching suburbs.  So, it's all market and sub-market dependent of course, but overall nationally things appear strong in the housing market for years to come, in my opinion.