All Forum Posts by: Jeff Trevarthen

Good questions @Hanyai Bungals .

1).  Most lenders will lend on a four-plex with traditional underwriting.  As @Brie Schmidt 

mentioned, you'll have to use personal income and assets to qualify.  You should be able to get a 30 yr. fixed note.  With my lenders, this is usually the only loan you can get.

2) If you're going to live in the property, no problem.  If not, then usually the loan-to-value will be a lot lower.  In other words, you'll have to bring more cash into the deal.  If you lie in any way and you get caught, then you'll get hammered for fraud.  Personally, I don't know a lot of commercial lenders that will lend on such a small loan amount.

3)  Not sure.  There may be several people who can help you here.

Hope that helps.

Jeff

You shouldn't try to "get around that".  If you're lying that's fraud and you will get hammered if/when somebody finds out about it.  It's not worth the risk.

Pay-off the credit cards.  Here's some benefits:

• Greater monthly cash on hand to save or invest
• Interest on debt which was once non tax deductible is now tax deductible
• Credit scores will increase after short time because of low (or zero) balance on other non mortgage credit products
• Lower monthly debt obligations

Just make sure you don't lie about anything.  If you really are going to use one unit as owner occupied and live in it part time, then you're good.  But if you buy it owner occupied, and rent out all four units, you could get hammered.  And the lender who did the loan will get hammered too.  

Probably tough to do, but you never know...

I ran this by my 10 lenders and none of them could do that type of deal.  Most of them want only single family residences (a vacation destination is preferable).  You also have to qualify outright (primary residence plus second home residence) for the debt ratios. 

Sounds like a good plan.

The seasoning on purchase transactions is going away. For example, I have a lender that will do cash out immediately after the purchase is recorded (read: next day)! Do this first to get your money back and THEN put the property in the LLC for the liability. I don't know of too many lenders that will do the loan on a single family unit with an LLC in place.

Commercial multifamily (5+ units) is a different story...

Sellers also like all cash offers because the chances of closing go up dramatically.  Think about it...if you're selling your property and you get one all cash offer and one financed offer, the cash offer is most likely stronger even though the contract price might be lower because the probability of it closing is faster and higher. 

I'm all about cash flow so I would be wondering why you would go with a 15 year fixed instead of a 30 yr fixed? You can always pay more, but you can never pay less.  :)

 If you take all closing costs (including the points to buy down the rate) and divide that by the amount of money you save every month (points vs. no points) you'll get a rough estimate as to how many months it will take to pay off the closing costs.  

It will be tough to get a mortgage at this point @Sam Regan  , but not impossible. As @Bill G. mentioned you might want to buy a primary residence first and then rent it out after a year. 

At $32k per year, that's $2666 per month. Subtract your car payment of 238 per month and that leaves $2428. If you have zero other debt (no other loans, all credit cards are paid to zero every month, etc.) then you're looking at a maximum mortgage payment of around $1019 which will have to include property taxes, hazard insurance, mortgage insurance (maybe) and any HOA fees. You can buy a primary residence with as little as 3-3.5% down, but often times you'll need reserves.

I would recommend you wait until you've been employed for 2 years.  I would also try to figure out how to either put more money down or make more income.  

Good luck! 

In my experience, lenders don't like to lend on incomplete projects.  The appraisers job is to give an as is value (current value).  Not a "future, potential, if everything is done" value.  Lenders don't like speculation. 

There are, however, different types of loans that can get you the money and the appraiser will look at the future potential value. I know Wells Fargo has a rehab loan and many banks will do the FHA 203k loan.