All Forum Posts by: Reid Chauvin

My $0.02, if you are open to the idea of finding a new primary and turning your current home into the investment, this is 100% going to be the more cost effective method in terms of financing. You can put a lot less down on a primary and the interest rate will be quite a bit lower than for an investment property. Good luck! 

You will apply for the mortgage loan as individuals on the same application. Each of your credit will be considered. If there are two of you, the lender will use the lower credit score between the two of you. You will need to inform the lender of your plan to transfer the loan into your LLC, so that they sell the loan to Fannie Mae and not someone else. A few months after closing (not exactly sure how long, but a title attorney should know this), you can transfer the title into your LLC.

Keep in mind that for those two rentals, on a cash-out refi your new loan can only be as much as 75% LTV. So you can maybe get out around $160k on #1 after closing costs. There's not much you will be able to take out on #2 if any. That's still a substantial amount on #1 that you could definitely make some sort of moves with.

I don't think I would personally use that money to pay down my primary at a 3.25% rate, but I'll be interested to see what others think. 

Welcome @Zoltan Gati! Feel free to reach out if you need help with estimating the cost for a 1-4 unit property in Nashville. The nice thing for a multi-unit property is that we can consider projected rental income to help get you qualified. Good luck in your search! 

Without knowing your personal financial situation, I would think it'd be a lot quicker to finance an investment property purchase with a mortgage rather than trying to save up to buy it outright with cash. 

You can only get an FHA loan if the property will be your primary residence, but this could be a great option if you're looking at multi-unit properties where you can rent out the other units. This is likely the lease costly method (both in upfront costs and in interest paid) for you to get started.

You can also look into getting a conventional loan for an investment property, you'll need to put down at least 15% for a 1-unit property (25% for 2-4 unit). 

I think in most markets right now, especially for investors who are just starting out, house hacking (i.e., financing the unit as a primary and renting out the other rooms/units), is going to be your best bet as far as getting your foot in the door to start building equity and cash-flowing. 

Find a good builder (ideally a referral from someone you trust) and have them take you through what they anticipate the costs to build your 4-plex to be. Biggest thing is going to be building in the right area where you are confident you can generate solid income with quality tenants. It's going to be a more stressful and involved process than buying an existing property, but you will learn a ton! 

Not necessarily a scam, though some of the lenders that market really heavily are a major pain to deal with. Rates did just drop a bit this week. If your rate is say at or above 3.5%, then it may be worthwhile to at least look into a refi and see how low you can get your rate/monthly payment and what the cost would be. 

i'd say it's only going to be worthwhile to do this if you plan to retain the home for longer than just a couple years. This could definitely save you some money and increase your cash flow if you are. 

What type of multi-family rentals? Financing for 2-4 unit properties (duplex, triplex, quadriplex) is a bit different than for 5 units and up, as 2-4 unit properties still fall under the 'Single-Family' bucket (at least in terms of getting a mortgage for one). Happy to explain more about financing 2-4 unit properties, but will have to defer to someone who specializes in larger properties for anything larger than 4 units. 

I agree with @Brad Hammond. Going the MLS route and using traditional financing is going to be much easier and less risky for someone starting out. Work with a good realtor and mortgage lender, and utilize the experience to learn about what it takes to find a home, qualify for a mortgage to buy the home, qualify the home for the mortgage through the inspection and appraisal processes and the closing process, will help position you to successfully do things more independently in the future.