All Forum Posts by: Patrick Collins

Also planning on attending - thank you for organizing Mike.

@Tyler Munroe great to see your name - hope things are good!

Concur with Brittany's train of thought here. 

1. Never should you be paying 2.5 points on an FHA product. Confirm what the no point option would look like in terms of rate/payment as you would want to refinance out of this program eventually and into a conforming product.

2. Need more information surrounding why your current lender is suggesting they cannot utilize the rental income on your investment property. Main questions would be, how long have you owned this and is there any rental income reporting on your most recent return. As Brittany referenced, you do not need a two year history in order to utilize the income in qualifying, in fact you can use the income with no tax filing in certain cases. Only trick to this would be if you do not own your current primary residence and you do not have a current housing payment, then no rental income from either the upcoming subject property or investment property can be utilized towards qualifying. Guides here; https://selling-guide.fanniemae.com/sel/b3-3.1-08/rental-inc... Freddie has similar intricacies, but also does not require a two year history of receipt; https://guide.freddiemac.com/app/guide/section/5306.4

If you can use the rental income to drive the DTI down so that you can reduce the down payment similar to that of the FHA product, the benefits of the conventional option will outweigh the FHA option, as I'm assuming you have a strong FICO based on rate quoted with no points.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $500,000
Cash invested: $100,000

Buy and hold multi-family property initially house-hacked prior to purchasing the single family in the burbs.

What made you interested in investing in this type of deal?

Great area and property needed significant renovation upon acquisition.

How did you find this deal and how did you negotiate it?

Open market.

How did you finance this deal?

Conventional financing.

How did you add value to the deal?

Property needed significant renovation to both units in order to make attractive to end tenants. House hacked while completing the renovation and have continued to invest in the property. My first tenants were paying ~1,600/month and current leases are climbing towards $3,000 a unit.