OfflineHi DGers
I'm excited because I finally got my credit score high enough to qualify for an FHA loan. My wife and I will be shopping for a home for ourselves and we would like to get a killer deal on something we can fix up. Any suggestions on techniques would be helpful and much appreciated.
I have heard that i can't get an FHA loan for a fixer upper(although I may have heard wrong). Can I get a hard money loan to fix up a place, then refi with the FHA loan?
Also, to all the serious investors out there, I plan to do several wholesale deals this year, I was wondering if it would be in my best interest to get a multi family house as my wife and my first place. She doesnt mind and I want to make a good long term decision. Really need help on this one, thanks everyone in advance.
Deshone - Mr. Real Estate
Go to homepath.com Dhttp://www.homepath.com/ Deshone and look up the area you want to live in. Some of the homes on that site have loans for repair also.
Steve and Veronica.
Steve and Veronica
Steve and Veronica's Journal.
http://www.deangraziosi.com/real-estate-forums/investing-journals/58073/...
http://www.deangraziosi.com/real-estate-forums/totally-fulfilled/72344/d...
I would really think hard about living in a multi family you own, being on site you will be getting knocks on the door at all hours,leaky faucet,toilet overflowed,frig not working,etc etc. Think long and hard about that one.
Jim Kendrick
http://kendrickpropertymanagement.com/
http://rochesterapartmentrentals.com/?page_id=10
Having a multi-family that you live in helps you in you being able to use the rent as income and when you want to get a second home it looks better to go from a 2fam to another 2 or 1 fam, then going from a 1fam to a 2fam. Plus being in Jersey and those taxes it'll ease the burden. The knocks on the door, etc will be worth it if you get it
Good luck
Thanks Steve and Veronica, I'm spending some time on that site right now. Jim, that sounds like very sound advice. I def would not want that happening. What route would you take. My wife and I are renting and my mortgage broker told me its easier to go from a Multi to a Single and get the loan. I'm going to be wholesaling for quick cash throughout the year, but I am very serious about building long term wealth. What would you suggest?
Elixbrown, always coming with the wisdom. I see it both ways and that's why we were thinking about it because it would keep the cost very managable. I would have to have the work setup with an outside source anyway because I know almost nothing about fixing anything, so I would make that clear upfront. I would like to get to the point where I own 30+ properties and have a systemized business with every component necessary(electricians, plumbers,etc) I would like to know where to start.
Also, am I able to refi with an FHA loan since I've heard that you can't rehab with an FHA loan. My plan would be to get a HM loan and refi with the FHA. Thanks
Also, am I able to refi with an FHA loan since I've heard that you can't rehab with an FHA loan. My plan would be to get a HM loan and refi with the FHA. Thanks
but thats something your mortgage broker should be able to tell you
Stop saying the letters HM and L. Get an FHA and always say in your mind and to anyone who asks "this is my primary home". All this "HML loan then refi" and "I want to own 30 properties", etc is all good but you're putting the cart before the horse; the ost important thing to have is stability in your home. Get the multi-family, use that as your base, and then go from there.
If you qualify for an FHA and you have a place that needs work, you should be able to qual for a 203K and if its under $30K you can still close as though it were a normal procedure. You will only be able to have licensed contractors work on your property anyway if you get a 203K so there is no concern of you having to hammer in nails.
One thing at a time; get the house you're going to live in and then let everything progress from there.
Good luck
has hit the nail on the head. You should consider that your course of action.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
You are the man, that definitely gives me some new things to keep at the forefront of my mind. So if you were me going into the multi-family, do i just basicly look for a property and proceed as normal or is there anything that I need to tweak because it is an FHA loan. If I find a great deal should I pull money out or keep all the equity in the property. I guess with my credit score hitting the qualifying level today, I've realized its time to get moving. I just want to have a strategy moving forward. I'm investing for the long term. Thanks again for everything.
Deshone - Mr. Real Estate
You can absolutely get an FHA loan for a fixer upper. It must be owner occupied though...same as the HomePath Renovation loan. My company specializes in these loans however, I don't know if they will help too much since they have to be owner occ. If so, you can get in with as little as 3.5% down with FHA and 5% down with HomePath Renovation. HomePath renovation has higher credit requirements but there is no PMI as FHA has mortgage insurance. PM me if you would like to know more!!!
Thanks JP, Sorry if I sound like a dummy, can you clarify what owner occupied means. Does that mean someone has to be living there. I'm interested in picking up a foreclosure or REO, something I can get a great deal on, 60-70% below ARV.
Owner Occupied just means that the person with the loan will be living in the home. So, it is not an investment property in which you would collect rent. You would actually be occupying the home as your primary residence. FHA does not allow you to have a loan on a rental property and you are only allowed one FHA loan at a time, with some exceptions. The same is true with a HomePath Renovation mortgage. Does this make sense?
One thing to remember with FHA loans is it will be very difficult to get an FHA loan on a multi unit property because, to the underwriters, it looks as though you are buying an investment...it is not impossible but, you may have a tough time getting FHA to insure it.
I understand what you're saying JP, I guess I'm a little thrown now. What are the guidelines for me to get this off the ground? If I get a multi family, I will definitely be living in the property and collecting rent. What obstacles will I have to deal with. I'm weighing my options out, I live NJ where everything is high and I would like a multi family to start building my portfolio. I guess the question is has anyone used an FHA loan to buy a multi family?
with an FHA as long as you are using it as your primary residence
It can be up to a 4 family and I believe $1.25m
Buy your house and do not for the first two years attempt to take any equity out; only because your first year is the toughest when adjusting to the rental-to-mortgage payment difference, and then adding in your heating bill which will be the next biggest bill. Plus trying to pull equity in this market might be tougher only if you've got enough equity spread but that shouldn't be a consideration at all.
I can give you more info just PM me when you get the chance
Elixbrown, I am sending you a pm for a few more details. Thanks