All Forum Posts by: Robert T.

Thanks @Stephanie P. for allll of your input, I apologize for any insult but I didn't feel like you were grasping understanding o the situation and just being quick to judge instead of educate.  You would think my lender would have given the same advise in the first place, but they did not which is the reason for the post.  The best solution I can come up with is to buy the duplex as an investment property with 25% down and a higher rate.  I still will likely/possibly live in it, and that's what's disappointing.  If I do it wont be for long, and if I don't then I made the right choice anyway.

@Eric Veronica read the post. I do plan on moving into the duplex.  

I'm not asking for people to admit to crimes or advice on commuting fraud on a public forum, you people are thick and not reading the post.  If I had crayons I'd draw you a picture, but I'm not sure it would help. 

Not hypothetical, and real people not robots that live in cubicles please, put yourself in my shoes-

1. You've lived away from home for 10 years.  You get a new job close to home and move in with your parents @30yo.

2. You've been trying to buy a house to no avail. 15-20 offers, multiple fall through and bidding houses up. 

3. A great opportunity presents itself over the winter for a duplex.."I could live there, it could make money, I could do both." Do you pass on that opportunity even though you still have sights set on a SFH for starting a family.

Say you don't buy that duplex, strike out this spring, what.. I have to live at home for 2 years? No I don't.

Say I buy it, move in in April, and my dream home comes FS in June/July..I can't buy it? THIS IS MY QUESTION

As I read earlier "There are honest ways to address special "real" circumstances".  THIS WOULD BE ONE.  Its not grey and I'm not trying to commit fraud.  It's a real situation someone must have been in before.  Thats what this forum is for.  According to you people your best advise is live at home, or pay the higher rate and live in an investment property IN CASE i move out which is absurd and probably why both of you work in real estate and have no investment properties but no problem giving advise. 

@Laura Hines thank you for that link that was good conversation.  

"There are honest ways to address special "real" circumstances" Is a quote from that conversation that I think struck me and that's all I'm asking is about in my situation specifically.  

My lender went back and forth and pretty much said without saying "we don't know what to tell you" what do you want to do? Well I'd like the lower rate.  With all intent it is going to be a primary, but if the house I've been waiting for for over a year comes up for sale this spring..then the fine print will not stop me from purchasing that home.  

My local market was insane last summer, every house with a painted mailbox was bid above asking price.  I expect the same this spring.  That enticed me to buy this duplex as a plan B when the opportunity presented itself, but without knowing what the future holds, why pay the higher rate and call it an investment before it becomes one?  Every situation is different, and thats why I provided some details with intent and background.  

With that said does anyone have real experience of can give first hand advise to a like/similar situation?

@Stephanie P.

Hey Rob.

Your intent is to commit mortgage fraud.

This is not just a semantics game. There are myriad reasons why the rates are lower for a primary residence vs an investment property, but simply put, if the mess hits the fan, what property are you going to let go first, the one you're living in or the one that you rent? That's why the one you're living in has a lower rate and higher ltv; because the risk of foreclosure is less than the rental.

I would rethink the ethics of the whole thing before I move forward and yes, mortgage fraud does get prosecuted, particularly when the information is out there on the internet for all to see.

Stephanie

Stephanie P.

So Stephanie would you recommend I buy this duplex as an investment and have a good chance of moving into it as a primary?  In which case I'm just paying the lender more money than I have to in interest?

The idea isn't to commit fraud, quite the opposite, that's why I'm asking on a public forum. The thought was purchase as a primary and "switch" it over to an investment and then into an LLC as stated above. The buying an additional primary in the fiances name would be the short term way of un-complicating things and ensuring we had a place to live IF the opportunity presents itself as I've been looking for 10 months and everything sells in 1 day for too much money so a plan B to fall back on doesn't seem like a bad idea.

Please advise on how you'd recommend me to proceed in this situation @Stephanie P.

Thanks Laura and congrats on your first duplex as well. 

With regards to the fraud aspect, I see it as I'm buying this duplex as a fall back plan B. 

I've traveled a lot for work and got the opportunity to move home for work quickly which landed me living with my parents instead of renting. It works. For now. But this duplex is a sort of plan B, if I don't find a house this spring. So it's purchased as a primary, and it very well may be, but ideally it will not be and I will stay the course as stated above and buy a primary in which case I believe I'm following all of the rules and just sort of want to get a better grasp on what I can/cannot do with that type of situation in regards to LLC and if anyone else can foresee any issues.

To add on to Laura's point- How common is it for a lender to come at you with some sort of loan fraud situation?

I've heard that if you add a primary into a LLC the lender can come and do some sort of quit claim and demand payment in full? Is that uncommon? Anyone have any experience there?

Hello, and thank everyone in advance.

So I live at home, but recently bought a duplex in a great location that works well in all aspects.  I plan on buying the property in my name as a primary residence as I get to put down 20% instead of 25% conventional; and I get a rate that's .5% lower than investment rates.  I also plan on renting both sides out, but having the possibility of falling back there as a plan B-C if this spring does not produce a primary residence for me. 

So another layer is this is purchased as a primary for finance reasons, but is intended to be an investment. I plan on buying a primary this spring time and putting it in my fiances name. She can carry the note and add me onto the deed. Can I add the duplex into the LLC at any time or do I have to wait 1 year? I was told I can only purchase 1 primary a year, is that true?

If for instance I have zero debt, and my income could carry 2-3 mortgages; and that still be <50% of my income; Would there be a problem with me scaling a house every spring for the next 3-5 years purchased as a primary and moved into a LLC? Or would it just become an investment property when I purchase another primary every year. After it's an investment it can then be rolled into an LLC?

If someone could maybe give some insight into pro's and con's do's and don'ts I'd appreciate it. 

Thanks, Rob

Talking to a friend he was trying to convince me to buy a starter home that would become a great rental with an FHA, as to keep my cash on hand for opportunity. I'm not a big fan of PMI and I used to see it as if you did FHA, you probably bought more house than you could afford. But the idea of keeping cash on hand is appealing. If rent is close to the mortgage+ pmi I may have to consider as I never really run FHA numbers.

as stated before I don't want to be a millionaire. I just want to have my primary. And maybe 1-3 SFH rentals that I acquire or buy small and move on. Making the first move is he most important and that's all I was asking upon is buying the larger house you know you're going to grow into. Considering numbers on both I have sit down and get more familiar with excel again.

Thomas S.  I don't know why you put "quotes" on serious girlfriend.  I didn't go into details about that as it wasn't relevant.  If it is now, I've known her for 30 years, and have already lived and traveled the globe with her, and we've had the talk and know what we want.  I don't need 4 bedroom but I want it.  Ive worked and saved hard enough I could buy my dream home in cash.  I'm not going to do that, but spending 100's of thousands of dollars on a home makes me uneasy and I just wanted some advise from people that buy homes all the time.  Hopefully all of your 12,000 posts are not all arrogant, ignorant comments.