All Forum Posts by: Michael Facchini

You can quit claim from LLC to personal if you're the sole owner...or co-borrowers are 50/50 on LLC and quit claiming as co-borrowers/individuals. No transfer tax. Sometimes have to just pay the water cert, but that is less of an issue now that the Water Dept is in the 21st century.

Depends on lender to lender.  We allow up to 15 on some programs, and then have a program for 15+.  But as investors start to get up there, they might look to commercial/blanket financing as the portfolio is large enough to grab the attention and warrants a more customized solution...

I recommend a month in advance....IE when the loan process is started, give or take....but we've done it a few days before closing too.  Depends on the scenario.....but either way should be able to get this done without much issue.

That said, you technically should not quit claim back to the LLC after closing. This would be a breach of the Mortgage and the loan could be called due if this info surfaces. Just an FYI. Fannie/Freddie do not allow LLC's. You'd have to ask your accountant and attorney about the benefits of an LLC on this property too. If it's for liability, you might want to research umbrella policies. Not saying to do it one way or another, but worth the conversations and research.

Correct, if you want to procure a conventional, agency loan (IE, Fannie/Freddie) at the lowest rates/fees, you'll need to quit claim deed the property from the LLC to the individual borrower(s) name(s). If your mother recorded a Mortgage/Note at closing and there is an actual lien, then you can refinance and payoff that debt.....but if it's cash-out and not paying off a lien, you'll need to wait about 4.5 month to get the process started and then close after the 6th month elapses to meet seasoning requirements.

Hi Daniel!  Welcome to Chicago and BP!  I commend you on the decision to get your real estate investing off the ground.  Very smart choice.  I bought my first multi-unit when I was 24, lived in it for many years (very cheaply might I add), and still own it to this day.  One of the best investments I've ever made and will probably own it for decades to come. 

As Brie said, if you purchase the home as a primary residence to live in, you can look at lower down payment options and better rates/terms. As low as 3.5% on FHA, or perhaps 5% on conventional depending on the area/census tract....but 5% is very common for most buyers in your shoes.

You'll want to get prequalified and also give thought to the neighborhoods that you'd like to focus on.  The latter can take some time as you research both on and offline.  I'm very well versed in all of this and happy to provide you more intel and education!  All the best as you piece together your initial understanding and never hesitate to reach out!

But if you're looking for a 3 or 4 unit all residential apartments, then that's a different thing.  That's a residential loan, and a little more straightforward....

It really depends on the exact scenario.  Commercial financing isn't as clear cut as residential.  Depending on the borrower's financial statement and resume (latter plays a big role, namely in terms of commercial & investment ownership/management experience), and the property specifics (location, Income/expense, condition), lenders could want closer to 30%, sometimes more.  25% is possible, but I'd plan on 30% to be safe.  Usually a 25 year amortization with a 5 to 7 year term.  Rate is also risk/appetite based, and for someone newer to the scene could be closer to 5% (the above isn't a quote by any means, very much speaking in generalities).  Hope that helps!

Hey Kevin!  First off, congrats on the decision to buy a multi-unit.  It's a great way to reduce your monthly overhead and then eventually have a long-term investment property (hopefully) that is financed easier and cheaper if a primary residence. 

Regarding your questions, I'd find a sizeable, responsive, and experienced lender that is in the city and knows not just the city market, but well-versed on multi-units.  They're their own animal.  Great investment, but they need to be done right...including financing.  An experienced lender that knows this area and does a lot of multi-unit lending can get you setup...and from there you'll have a much clearer picture on the road ahead.  Have your credit pulled only once for now, however initial conversations and very ballpark numbers don't require credit to be pulled. 

20% down is a great way to roll of course, but not always necessary. With how cheap money is right now and this being your first purchase/real estate investment, you will want to consider all options, weigh pros/cons, and decide from there. Putting 5% down can be an option (or certainly anything between that and 20%) via FHA, but there are non-FHA options available that can sometimes be more attractive. Hope that helps!

Hi Ashley, welcome to BP!   3-4units in the city and nearby suburbs are in high-demand right now...and don't see that stopping.  So, in light of the competition and weeding through the good/bad investments, working with an experienced agent that not only knows the submarkets/neighborhoods you're interested in, but is well-versed on multi-units in those markets, and knows how to valuate that investment, well it's absolutely key.  That experience will make all the difference.  So, getting educated on the basics on your own is absolutely encouraged, but eventually I'd recommend getting in touch with a top 5% agent for the neighborhoods and property type. 

As for getting pre-approved, it's definitely your first step...especially for this property type. You might look at FHA, but there are non-FHA options that could be a better fit.

As has been stated above, you need to move in within 60 days from closing and you are expected to live there at least one year. Also, as you pointed out, you can put down as little as 5% down with HomePossible, get a slightly reduced interest rate and Private Mortgage Insurance....as long as the property falls within a certain census tract. Anthony, as you noted, this is a better route than FHA in most cases...but again, is property location specific. I do a ton of HomePossible multi-units, so would be happy to answer any other questions!