All Forum Posts by: Rolando De la Cruz

Quote from @Derek Brickley:

Hey Rolando,

Congrats on that opportunity man!  There are a number of options out there to help with househacking (I bought a househack last year).  Would need to know a bit more with your situation, but we typically work with guys in the NHL who might be starting out and are looking for some possible help on getting into their first home.  Feel free to reach out here, happy to see if we might be able to help.

 I would love to go into more details about my situation!

Quote from @Elias Halvorson:

FHA goes to at least 50. Some conventional programs go up to 50% DTI as well. The problem you're going to encounter is your income is not stable, and you just started doing it. I have never lent to an athlete, but I have lent to a few entertainers. I think the government (FHA) and conventional side will require at least a year, if not two of this type of income. There is no stability and it is seasonal.

I just graduated college and some lenders told me that my position as a student could be used for the 2 years of work requirements. And I do agree that with professional sports, income is not stable unless you are at the highest levels and you get millions of dollars in a contract that is fixed on a given amount of years. 

Hello, BP community!

Here's my situation, I was going to start a position as a project engineer this upcoming Monday with an annual salary of $72,000. With that income and currently no debt I was able to get pre-approved for properties in the 300k mark. Two weeks ago I was offered the opportunity to play professional baseball for the Los Angeles Angels so I decided to pursue that because it has been a dream of mine. With baseball, you start making money once you reach the big leagues, in the minor leagues, every player's salary ranges from 34k to 39k. That decreases the amount of money I would be approved by a lender to purchase a property. The price of the properties I intend to house hack in my college town located in Abilene Texas near Fort Worth ranges from 150k to 200k. For properties in that range, my monthly payment will be more than 40 percent of my monthly income but I should still be able to pay for that by renting the other rooms. I am expecting a cash flow between $1200 and $1500. I will only live in one of the units 4 out of the 12 months of the year because the other 8 months I will be with the Angels organization, during that period they provide a place for me to live and also food, so during those 8 months I would have more money I could save up and use in my house hack. I have 5k saved up and I know I would need around 12k if I do 3.5% down with an FHA loan. My question here would be if lenders would be willing to go when my mortgage payments would use a little bit over 40% of my monthly income. If not what would be some other options? I also want to purchase the property by the end of the year and was wondering if there are some grants that would help me with down payment assistance and if it would be recommended in my situation.

Upon graduating college recently, one lesson I've learned is that the best professor we can have is ourselves. "Going to a classroom won't change anything unless the student takes ownership of their learning experience" would be something one of my professors would say and he encouraged us to be lifelong learners emphasizing the idea to continue reading books after college was over for us. I understand that reading is valuable, which is why I'm curious to know which book you would recommend for a beginner like me to start with.

I have yet to buy my first property but my goal is to house hack every year,  while buying and renting properties to hold long-term until my portfolio brings more cashflow than my W-2 job. After that I plan to quit my job and become a full time investor flipping properties.

Quote from @Ryan Kelly:

@Rolando De la Cruz you don't have to be stuck using an FHA loan to get a low down payment loan option. There are conventional loans as well with low down payments and the PMI falls off once you reach 20% equity.

In this higher interest rate environment, lower down payments does make it harder to cash flow, so just keep that in mind.

That is something I will keep in mind once I start analyzing more properties, it is good to know that there are properties that might not work with an FHA loan, but might work with a conventional loan and I am aware there are other types of loans I'm not yet familiar with but excited to keep growing on my knowledge.

Quote from @Sarita Scherpereel:

@Rolando De la Cruz I would never tell the seller my intentions for the property. The less you say the better. Let your realtor guild those conversations. It sounds more like you're planning on getting roommates. Which is fine to talk about but in some places SROs are frown upon or not allowed. If you need that for your numbers to work then I would have a conversation with your realtor. You should be using someone who understands these restrictions (if any) in your state/area. You might not be talking about SROs but more of a roommate situation. In that case, just call it that- it's more direct. Best of luck on this deal! 

 Thank you for sharing this information. I currently rent a house with two other roommates from college but I wasn't aware that SROs are not allowed in some places, something for me to keep in mind when investing in different markets in a future.

Quote from @Ryan Kelly:

@Rolando De la Cruz I love your plan! Happy to chat about house hacking options in the Austin area along with some best practices.

That is awesome to hear! After I move to Austin and have enough saved for the down payment and CapEx I will be in touch!

Quote from @Ty Coutts:

@Rick Albert mentions a great point. You can absolutely keep going from FHA to FHA (as long as you move into the properties), but you will need to refinance to first home into conventional before using FHA again. Also a weird caveat is that in order to count rental income on any FHA property to offset the mortgage for your DTI calculations on the next approval, the properties have to be more than 100 miles away.

Also, in regards to communication with your lender, I always tell my clients to consider me as their lawyer and tell me everything (good, bad and ugly) and then I can best help them navigate how to communicate to the Underwiters. Let me know if you ever want to chat more directly about house hacking as my wife and I personally do this as well as most of my clients that I help!

That is something I just learned. I will keep in mind that I would have to be 100 miles away if I want to be able to count the first FHA property rental income to help with my Debt to Income calculations. I just graduated college and I start a new job next month as a Project Engineer for a multifamily construction company. I am planning in acquiring my first house hack within the next 3-5 months after I save enough for the downpayment and the capital expenditures. I would like to chat with you more directly about house hacking as I approach my first deal! Thanks for your willingness to help!

Quote from @Rick Albert:

Ty answered most of it. The only caveat is you are only allowed one active FHA loan per customer. This means you would need to refinance the current house into a conventional loan before you can get another FHA loan.

 Thank you for sharing Rick, I knew you have to wait 12 months but I just learned about having to refinance the current house into a conventional loan before house hacking again.

Quote from @Ty Coutts:

Hello Rolando De la Cruz, I think I can help with your question. Here's how to navigate the information sharing with different parties involved:

- The seller: generally, you do not need to disclose your house hacking plans to the seller. The seller's main concern is that you are a qualified buyer who can close the deal.

- The lender: when applying for a primary residence mortgage loan, you are typically required to intend to live in the property as your primary residence for at least 12 months. This is especially true for loans with low down payments, like FHA loans with a 3.5% down payment.

- The realtor: like the seller, realtors do not typically need to know your house hacking plans. However, sharing your intentions with your realtor can be beneficial. A knowledgeable realtor can help you find properties that are well-suited for house hacking.

I hope this helps, and good luck with your first deal!

 This information was really helpful thanks for sharing!