All Forum Posts by: Michael Garson

I've been eyeing a multi in Philadelphia for a while, it was under contract, buyer lost financing and its back on.

Planning to attempt some mix of seller financing and my own creative efforts for downpayment, rehab funds.

The question is, it was being used as a single for a while. I got the city certification and it says 3 unit plus office, which is great, for later. But will the city have a problem if I live in it as a single, I have friends who would move in with me and share the fix up work, we can live in different units as we fix each one up.

Then switch back to multi later when the work is finished? I'm not sure if they'll come poking around and object after I buy it or not.

Which house first?

I found a deal on a cheap, small house, for 65K. I plan to live there for a year, and fix it up a bit, before moving on and renting it out. Which allows me a 5% down loan and I'd have cash left over to fix it up.

So, when plotting buying my second house, which would become the owner occupied home, would they consider the new house an investment, and thus I'll need 20% down for that?

My concern is that by buying the investment house first, I ruin my chances at getting a less than 20% down loan on the 2nd home, where I'd really plan to settle in. I'll be looking at a 150K or so house after that, so it'd take me a while to have the 30K plus closing to pull that off.

Is it a better strategy to get the 150K home first, then buy the investment home? It's just that this one house is a great deal, and I wouldn't mind living there for a year, before moving on.

Yes, sadly. I didn't understand that this would do anything to me at the time. I would have handled it differently had I known. I assumed it was no big deal, that if my sister-in law didn't win, the insurance would pay anyway.

She wasn't really at fault, the case was a little bit of both at fault, but the case basically concluded in the other driver's favor. I just don't understand why it should count on my credit report.

I am shopping around for loans, and recently checked my 3 Fico scores.

I was alarmed to see that my 3 scores were 698, 709 and 752.

I take great pride in paying everything on time, and having a good score. I had assumed all my scores were 740 and above.

Heres the story, anyone who can help, or advise I would greatly appreciate it!

The civil judgement from 2011, is only listed on the two low scoring accounts. So I am going to assume that is the reason for the lower scores. Could it really affect it by 40-50 points?

The judgement was due to a car accident involving my car that I wasn't even involved with! My sister in law was borrowing my car. My insurance company paid the amount immediately after the court case. I am listed on the case along with, my sister in law and my ex-wife (perhaps she was co-owner of the car, or just listed on the insurance?).

Transunion account shows it as paid

Experian just says N/A.

It doesn't appear on Equifax.

What to do?

I'm not sure what steps to take.

1. I could report to Experian that it was paid, but I'm not sure if that will help anything or not (they say that don't even know if it would change anything)

2. I could try disputing it altogether, maybe I get lucky, and it doesn't reappear. It technically does have my name on it though.

3. Or can I make a big stink. My banker said I should sue the sister in-law to get it taken out of my name (so it goes against her insurance). But I don't really want to do that, it sounds like a terrible thing to do.

4. I could sue my insurance for not taking care of it properly, and for carelessly allowing it to go on my record. (Claim the damages and extra cost in increased mortgage payments). But I've never sued anyone, and really don't believe in doing that sort of thing, it just sounds terrible to have to go that far.

5. Or is this not really hurting my credit that much? The only other downsides I have are the $8000 I owe on my cards (with a 25% usage of credit). All my accounts are marked in good standing and nothing was ever late!

Thanks to anyone who responds.

I am looking at buying a 3 plex in Philly. It's a decent deal, but I'm not sure it's legal.

How can I tell if it's a legal? The philadelphia zoning map doesn't say anything, and according to taxes, it's a single family house. But, it has separate meters for electric and gas.

I actually did. But only for a duplex. M&T Bank has something and 3rd fed bank has something. They're both local banks, it falls under their "Community Mortgage" plans.

The question is, if I take a personal loan from my credit union for $20K, 7 years at 11%, would that preclude me from using it for a downpayment, plus closing costs? I plan to season the money for several month's, while I pay off my CC's with my income.

I know this is a little expensive, but it speeds up the process by about a year for me. I've already factored it into my debt to income ratio, and it won't effect it that much, once the CC's are paid off.

My income is decent, and my credit is more than excellent. I just won't have any cash on hand after paying off the cc's. After doing this, I would just turn my credit paydown abilities towards the personal loan.

I'm planning on doing a 5% loan and buying a multi-unit owner-occupied building. If I buy cheaply enough I could hold on to some of the cash for rehab as well. I also found a non-fha loan that will do multi-units.

To answer Darrick P., I found them on MLS (I know not everyone would approve) but at least they are motivated sellers!

I'm not apartment living now, but rental house with roommate. Plan to leverage roommate in the situations (also it has been partial practice towards landlording).

To answer Jeff S. No Garage (although I am on lookout for that), for some reason 2 units move slower than 3, or Singles. Deals are usually in the overlooked. Either one has potential to get me there faster, kind of the same deal based on cash-flow.

I'm a new to this, and would like little advice on strategy.

My plan is to end up with with two houses in two years. One rental, and one for me. Then see where I'm at from there. Basic buy and hold, conservative plan.

My plan is either -

A. Cheap single family, live with a roommate, save money for downpayment then buy next house.
or
B. Multi unit with FHA loan, live there for a year, then later house for me.

Both plans allow me to live in in either place, and I am paying approx. $300/mo. of the expenses my myself.

Looking at two properties now , can't decide which way to go first.

All houses are in Philadelphia:

1st Option -Small Single Family 3 bedroom. 1 1/2 bath
110K

Would rent for approx. $1,000 - $1,100 without too much work.

Looks like it was a senior's house, old wallpaper, decent shape, My plan would be live there for a year, have roommate pay half the mortgage, get rid of carpet, spiff up wood floors, update heating (special programs make this almost free) etc... Then move out and rent it. Fix basic kinks to make it a low maintenance rental.

Comparables: Similar house (very fixed up) 3 doors down just sold for 200K, Some sold for 150K. Some sold for 115K. I might get some easy equity out of this, not sure how much (could possibly use towards next house).

2nd Option 2 Unit -
$200K -

House already improved - (For comparison sake we'll assume it needs nothing)
1 unit currently rents for $950, other could rent for $700

I would live in the 1 bedroom and save for next downpayment.

Satisfy 1-year owner-occupied deal, move on to another building and rent out both units.

Comparables: Single units in similar shape are selling for $150 for much smaller 2-3 bedroom. Best other comparables are 3 units selling for 300K.

Thanks for any advice!!!!