All Forum Posts by: Sylvia H.

Hi Scott,

I would speak to a lender and see what programs exist in your area for first time homebuyers. I also tell my clients that a great place to start in the real estate investment game is to purchase a two unit property. It gives you a tase of being a landlord and you will have help in paying your mortgage with the help of the second unit. You might get help with the downpayment and worse case you will have to put down 3.5% if you get an FHA mortgage. Keep in mind this is for OWNER OCCUPIED ONLY so you will have to live in the two family home, but it's a great start. You say what your income is so hard to know that end of it but a quick call to a mortgage broker who handles FHA would be just what the doctor ordered. Good luck.

Hi just thought I'd jump in for a minute to talk about credit report. If the properties were in the name of an individual they will stay that way until you refinance them. Therefore regardless of you forming an LLC and transferring the property to the LLC they will remain on your credit report. If you transfer the property to an LLC and the lender finds out they can call the mortgage due and payable because you effectively transferred ownership to another entity.

Best of luck

The rule of thumb is 1 year. You must occupy the residence for one year. After one year if you plan to move to another property you are free to do so however there has to be a good reason for the move. i.e. larger home, closer to work, single family purchase vs multi. You can't tell a lender you are moving from a single family home to a multi family home in the same town or even the next town because the underwriter will feel that you are not going to occupy the home and just want to get preferred financing.  The penalty for mortgage occupancy fraud is severe. It's a federal offense. One guy got a year in jail and a 537k fine. Don't do it. It's not worth it.   A mortgage broker

 If you plan to rent your home as an Air bnb.  Your insurance company may not allow it because you are now using the property for a business not as a residence. The risk of fire, liability etc goes up with every new person who stays there. If you had a loss and did not disclose to the insurance company that you were using this as a business rental they could refuse to pay your claim should you have a loss. 

If you obtained a mortgage and told the lender you are going to owner occupy the home you and you alone must occupy it for at least a year in order for it not to be considered occupancy fraud. Lenders have ways of finding out where you live without having to knock on your door. When in doubt, don't.  

Mortgage Broker

A mortgage would be the best way to go. Don't take out a HELOC to pay for an investment property because it's a variable loan and rates are on the rise. You will soon be having to refinance your home to pay it off. Get a mortgage on the investment property and let that property stand alone. Partners are never a good idea because it will be hard to get out of should you not get along or see things the same way. I own many properties and all were either cash or financed. My home is separate from the income properties and all are in separate LLC's.

Very good question.   I was in your same situation and I chose to raise the rents to market on everyone. I had to. My costs increased and I could not continue to rent units for the prices I was renting them.  You home is a business and you need to run it like a business. Don't be afraid of what people might or might not do. Right now apartments are scarce. Also why would someone move out because you raised the rent when the new apartment they are going to move into will be the same prices as your increase? They won't. By the time they get up the security deposit and moving expense they will stay where they are. Send them a nice letter and tell them that your costs have gone up and you need to bring rents to market. None of my tenants blinked an eye because they knew what rents were going for so why move?