All Forum Posts by: Mike Scaccia

Hey Shalen! 

Veteran mortgage professional here in Chicago. To be clear, you never want to say anything is a "loan" or underwriters will treat it as debt and it opens a can of worms. Instead, you simply could have had the funds "gifted" to you, if you were to occupy the residence. If it is just a straight investment property and you aren't house hacking a multi family or something along those lines, than yes what your loan officer told you is true. Deposit funds, season for 60 days and you should have no issue. As for a contract to repay the money from mom and dad, i'd keep any of that far away from your person underwriting your loan. Most often parents aren't requesting a written and legal contract to loan their kids money but if you can definitely make it legit, especially if there is some form of interest accruing on the money lent out.

 @accountclosed can you help me delete my company page? 

not sure what you mean! Can what two things be combined?

You will need to qualify at whatever the note rate/start rate is. So in my example you are qualifying off of a rate of 6.5% not 2% lower, that's correct. The temporary buydown is a tool to help create cash flow.

 Thanks! @Joseph Romano 

Feel free to shoot me a DM if you want to get more in depth! I'd love to help!

 Hey Irene! 

So sorry for the delayed response! To answer your question FHA financing has a specific rule for properties over 2 units. So on 3-4 unit multi family properties, in order to be eligible for fha financing the gross rental income of 75% of the units must meet or exceed the total monthly mortgage payment. So let's say its a 4 unit property and your total rents across the three units (cause you're occupying one of the 4) is $3,000 a month. Your total PITI (principal, interest, taxes, insurance) must be less than or equal to $3000 a month for the loan to be approved with FHA.

The 2-1 Temporary buydown is strategy utilizing seller concessions or seller credits to TEMPORARILY buy down the interest rate 2% the first year, 1% the second year, and years 3-30 will go back to the note rate. So lets say todays rate is 6.5%. The first year you have the mortgage you will have a payment based off of a rate of 4.5% (2% lower than 6.5%) year two the rate goes to 5.5% (1% lower than 6.5%) and year three- thirty the rate goes back to the start rate of 6.5%. However, the goal and hopes would be that in that 24 month period where the rate and payment is lower, that you refi in that time to permanently lower rate! Feel free to shoot me a DM and perhaps we can connect further! 

Thanks!

@Irene Low 

Congrats on beginning your journey in real estate, and no better way than with a house hack of a multi family property!

With elevated home prices, and interest rates positive cash flow is hard to come by BUT not impossible. 

Let me paint a picture of what i did for my own property. We utilized a conventional loan at 5% down to avoid the FHA self sufficiency test, purchased a 4 unit property. We opted to negotiate a max seller concession and big over asking price to the seller the same amount. We used those funds to complete a 2-1 temporary buydown. In year one our interest rate is under 5%.. which allowed us to actually cash flow quite a bit on the property! Now, the rate will go up after years 1, and 2.. but by then what you bank on is that rates will be in a better position, you refi, permanently reduce the rate, you have principal paydown by your tenants, and with average appreciation conservatively at 4% annually, it always makes sense to purchase a property if the payment makes sense for you, and you can afford to do so..

Once rates drop, there will be much greater demand and therefore greater competition which will inevitably drive prices higher. Imagine missing out on that appreciation... People who owned during the pandemic saw their equity fly through the roof. We're gearing up to see more of the same! If you have any questions or would like to connect further, feel free to shoot me a message! Best of luck and go get em!

Hey Bob!

Congrats on beginning your journey on the potential relocation and start to building your real estate portfolio. I work with tons of buyers who are looking to finance a multi family property to house hack. It's something i've personally done over the years to acquire properties with low down payments. I'm located in Chicago but operate quite a bit in FL and have a good deal of connections and referral partners that would be happy to assist you! Feel free to shoot me a message if you'd like to get specifics!  

Hey Jovelyn! 

Congrats on beginning your journey to house hacking and building your real estate portfolio. 

I used the house hacking method myself years ago to purchase a 4 unit property in Chicago and have helped many more do it as well! There is a few options you have when it comes to financing and i'd be happy to help you review your options. In addition, i have some really great realtor contacts in the San Diego area that i think would be a massive value add to you! Feel free to message me if you'd like to connect further!

Thanks!

Hey Rayjunior! 

I hope you're doing well! I see nobody got back to you on this post! 

The scenario you are referring to is exactly what my best friend and i did to acquire our very first multi unit, and since then have been able to scale up.

One or both of you could be on the mortgage, and both could be on the title of the property giving you equal ownership rights in the property (will want to consult a real estate attorney and consider forming an LLC to divvy up percentages etc..)

Hey there! 

I am a Chicago native and local mortgage lender and investor.

Is the STR you are inquiring about going to be your first property? Also, what are you main reasons for looking to STF in Rockford, not knocking the area by any means but there is so much opportunity within the city limits where you're less likely to have extended vacancies.

Short term rentals have taken a beating this year, while long term rentals have seen an uptick in what they can charge due to high home prices, and inflated interest rates. People have to live somewhere.

We host a ton of investor meet ups for ALL things real estate, short term rentals, long term, fix and flip, buy and hold.. you name it, we cover it! I'd love to share more details with you on how to get involved or attend so you can gain insight from investors who already own 10, 20, 30, 40 doors...

PM me!