All Forum Posts by: Reid Chauvin

@Thomas Key - A renovation purchase loan could be a good option for you. You can finance the purchase of the home as well as the renovation costs together using either a conventional or FHA loan, putting as little as 3.5% down. Loan payments are amortized over 30 years, so probably the cheapest option for you in both upfront and monthly costs. Happy to provide additional info!

Hi @Taylor Robertson - There are a few things to sort through here as to what your best option is. Doing some quick math, buying down the rate for $5,000, saving you $85/month in mortgage pmt, will take about 59 months to actually start saving you money (5,000/85 = 58.8). 

I'm assuming this is an FHA loan if you are only putting 5% down on a duplex. You are going to have mortgage insurance for the life of the loan if this is the case, and that MI is not cheap...If you plan to hold this property for the long haul, odds are you will want to get rid of that mortgage insurance one way or another. Refinancing in a few years is your most likely route.

I'm not sure if I would increase my down payment amount with the $5k, would probably just use it to help cover the upfront costs that way you have some reserves for furniture, repairs, etc.

This is correct. You should be applying for a 2nd home if you plan to occupy for some portion of the year like you mentioned, or an investment property if you have no intention of occupying the property at all. Here are Fannie Mae's brief requirements for 2nd home loans:

https://selling-guide.fanniema...

Hi @Parthenia Holly - as others have mentioned, getting a conventional loan under your name will be most advantageous in both upfront costs and rates. Minimum down payment requirement for a 2nd home is 10%, but putting as much as 35% down will get you better rate pricing for sure. 

Feel free to reach out if you need further assistance! 

I agree with what @Jay Hurst said: if it's an income generating investment property then it generally won't negatively impact your ability to qualify for another loan. Even if you had a loss on the property, if it was due to a one-time extraordinary expense (like repairs after a major storm) then that can be taken into account in how the property affects your DTI. Even if you omit the property in your loan application, many lenders use a service to run data checks when processing your loan in attempt to identify properties associated with your name, at which point you would have to disclose the expenses associated with the property anyway.

Hi @Derek DeLong - I agree with what others have said and would recommend keeping some money in reserves and going for the B class neighborhood. There are inevitably going to be some unforeseen expenses, whether it be repairs or you have to cover the entire mortgage yourself for a month or two while you try and find roommates. 

Also, in my opinion, you are probably going to have an easier time attracting roommates around your age with decent house/cheaper rent than with nicer house/expensive rent. 

Assuming it's a 1-unit property, if you have solid credit I'd be looking at putting 3-5% down with a conventional loan. If your credit is below 700's or if you are looking at multi-unit properties then I'd look at putting 3.5% down with an FHA loan.

Happy to answer any specific financing questions. Feel free to reach out! 

@Nathan Frost - you should have no issue finding a mortgage with 30 year term with at least 15% down on investment property (assuming you can qualify on your personal income). Feel free to reach out if you'd like assistance. 

@Pasha Gorky - if you and the buyer do not want to use a realtor then you can draw up a purchase agreement yourself. I'm sure there are examples online for your state. You will still need to find a title company to close with. 

Hi @Angelo Aponte - if you are willing to live in the property and rent out the other bedrooms/units (aka House hacking), then you could potentially use a low down payment option with an FHA loan or a conventional loan. If you have no intention of living in the property then you'd be looking at a conventional loan with at least 15% down, or a DSCR loan if you cannot qualify for a conventional loan with at least 25% down.

There are numerous other strategies out there, but these are the most common and straightforward.

@Travis Reed - I rent out a property near LSU (definitely a party school) and my tenants are generally college students. While the house in some instances has been pretty dirty upon them vacating, I wouldn't go so far as to say it's ever been 'trashed'. I have a cleaning fee in my lease, and if anything were to go beyond that in terms of damage I would withhold the necessary portion from their security deposit. I actually generally feel better about renting to college students than individual families as the burden of rent is split across 4 individuals (and their parents) instead of 1 family.