Buying a multi family

[sd_matt]

Is there any such thing as a zero down investment loan? What if I am VA qualified? If there is such a thing what kind of FICO and income do I have to have? Does a given income qualify me for more $$ for a loan for a multi family property?

[4plexowner]

“Is there any such thing as a zero down investment loan?”

no zero-down that I am aware of

the closest I came to ‘zero down’ was putting 20% down, getting an 80% first mortgage and then taking a 20% 2nd mortgage a few months later – within 3 months I had a very nice 4plex with none of my money invested

“Does a given income qualify me for more $$ for a loan for a multi family property?”

1 to 4 units is considered residential property and qualifies for those types of loans – as soon as you get the 5th unit you are talking about commercial property and the down payment is much higher (35%?)

live in one of the units and you can get owner-occupied financing which will be your lowest down payment

what’s cool about multi-unit is that you count some of the income from the rental units when you are qualifying for the loan – when I was buying multi-unit (1998-2002) lenders were counting 75% of the rental income towards the loan – I believe this percentage has dropped in the last year – different loan programs may accept more or less of the rental income

one challenge with multi-unit in San Diego is that a decent property in an OK location almost certainly requires a jumbo loan – jumbo loans have a higher interest rate – I think current cutoff for jumbo is around $650K

[4plexowner]

“Is there any such thing as a zero down investment loan?”

no zero-down that I am aware of

the closest I came to ‘zero down’ was putting 20% down, getting an 80% first mortgage and then taking a 20% 2nd mortgage a few months later – within 3 months I had a very nice 4plex with none of my money invested

“Does a given income qualify me for more $$ for a loan for a multi family property?”

1 to 4 units is considered residential property and qualifies for those types of loans – as soon as you get the 5th unit you are talking about commercial property and the down payment is much higher (35%?)

live in one of the units and you can get owner-occupied financing which will be your lowest down payment

what’s cool about multi-unit is that you count some of the income from the rental units when you are qualifying for the loan – when I was buying multi-unit (1998-2002) lenders were counting 75% of the rental income towards the loan – I believe this percentage has dropped in the last year – different loan programs may accept more or less of the rental income

one challenge with multi-unit in San Diego is that a decent property in an OK location almost certainly requires a jumbo loan – jumbo loans have a higher interest rate – I think current cutoff for jumbo is around $650K

[4plexowner]

“Is there any such thing as a zero down investment loan?”

no zero-down that I am aware of

the closest I came to ‘zero down’ was putting 20% down, getting an 80% first mortgage and then taking a 20% 2nd mortgage a few months later – within 3 months I had a very nice 4plex with none of my money invested

“Does a given income qualify me for more $$ for a loan for a multi family property?”

1 to 4 units is considered residential property and qualifies for those types of loans – as soon as you get the 5th unit you are talking about commercial property and the down payment is much higher (35%?)

live in one of the units and you can get owner-occupied financing which will be your lowest down payment

what’s cool about multi-unit is that you count some of the income from the rental units when you are qualifying for the loan – when I was buying multi-unit (1998-2002) lenders were counting 75% of the rental income towards the loan – I believe this percentage has dropped in the last year – different loan programs may accept more or less of the rental income

one challenge with multi-unit in San Diego is that a decent property in an OK location almost certainly requires a jumbo loan – jumbo loans have a higher interest rate – I think current cutoff for jumbo is around $650K

[4plexowner]

“Is there any such thing as a zero down investment loan?”

no zero-down that I am aware of

the closest I came to ‘zero down’ was putting 20% down, getting an 80% first mortgage and then taking a 20% 2nd mortgage a few months later – within 3 months I had a very nice 4plex with none of my money invested

“Does a given income qualify me for more $$ for a loan for a multi family property?”

1 to 4 units is considered residential property and qualifies for those types of loans – as soon as you get the 5th unit you are talking about commercial property and the down payment is much higher (35%?)

live in one of the units and you can get owner-occupied financing which will be your lowest down payment

what’s cool about multi-unit is that you count some of the income from the rental units when you are qualifying for the loan – when I was buying multi-unit (1998-2002) lenders were counting 75% of the rental income towards the loan – I believe this percentage has dropped in the last year – different loan programs may accept more or less of the rental income

one challenge with multi-unit in San Diego is that a decent property in an OK location almost certainly requires a jumbo loan – jumbo loans have a higher interest rate – I think current cutoff for jumbo is around $650K

[4plexowner]

“Is there any such thing as a zero down investment loan?”

no zero-down that I am aware of

the closest I came to ‘zero down’ was putting 20% down, getting an 80% first mortgage and then taking a 20% 2nd mortgage a few months later – within 3 months I had a very nice 4plex with none of my money invested

“Does a given income qualify me for more $$ for a loan for a multi family property?”

1 to 4 units is considered residential property and qualifies for those types of loans – as soon as you get the 5th unit you are talking about commercial property and the down payment is much higher (35%?)

live in one of the units and you can get owner-occupied financing which will be your lowest down payment

what’s cool about multi-unit is that you count some of the income from the rental units when you are qualifying for the loan – when I was buying multi-unit (1998-2002) lenders were counting 75% of the rental income towards the loan – I believe this percentage has dropped in the last year – different loan programs may accept more or less of the rental income

one challenge with multi-unit in San Diego is that a decent property in an OK location almost certainly requires a jumbo loan – jumbo loans have a higher interest rate – I think current cutoff for jumbo is around $650K

[sd_matt]

“…some of the income from the rental units when you are qualifying for the loan…”

That’s also what I was trying to verify.

The guy I was talking to said that there was 100% down but I’m thinking that was pre 2006-7.

So one could keep buying live in 4-plex’s over and over without going 35% down?

Even at 20% down I would have to go hard money but I don’t think that anything would pencil until one to two years from now.

Do you know any brokers that are good at creative deals?

[sd_matt]

“…some of the income from the rental units when you are qualifying for the loan…”

That’s also what I was trying to verify.

The guy I was talking to said that there was 100% down but I’m thinking that was pre 2006-7.

So one could keep buying live in 4-plex’s over and over without going 35% down?

Even at 20% down I would have to go hard money but I don’t think that anything would pencil until one to two years from now.

Do you know any brokers that are good at creative deals?

[sd_matt]

“…some of the income from the rental units when you are qualifying for the loan…”

That’s also what I was trying to verify.

The guy I was talking to said that there was 100% down but I’m thinking that was pre 2006-7.

So one could keep buying live in 4-plex’s over and over without going 35% down?

Even at 20% down I would have to go hard money but I don’t think that anything would pencil until one to two years from now.

Do you know any brokers that are good at creative deals?

[sd_matt]

“…some of the income from the rental units when you are qualifying for the loan…”

That’s also what I was trying to verify.

The guy I was talking to said that there was 100% down but I’m thinking that was pre 2006-7.

So one could keep buying live in 4-plex’s over and over without going 35% down?

Even at 20% down I would have to go hard money but I don’t think that anything would pencil until one to two years from now.

Do you know any brokers that are good at creative deals?

[sd_matt]

“…some of the income from the rental units when you are qualifying for the loan…”

That’s also what I was trying to verify.

The guy I was talking to said that there was 100% down but I’m thinking that was pre 2006-7.

So one could keep buying live in 4-plex’s over and over without going 35% down?

Even at 20% down I would have to go hard money but I don’t think that anything would pencil until one to two years from now.

Do you know any brokers that are good at creative deals?

[4plexowner]

“So one could keep buying live in 4-plex’s over and over without going 35% down?”

according to my loan broker at the time, 1 year of owner occupancy was reasonable before buying the next owner-occ property – I followed this guideline and moved numerous times over the years – on at least one of the properties I provided the lender with a letter explaining why I was moving out of one owner-occ property and buying another one in less than a year – something along the lines of, “I thought I would enjoy living close to the beach but found the traffic and noise unbearable”

in hindsight I don’t think anyone really cared – the bubble was in full swing – lenders just wanted to close loans – evidently even dead people were getting loans so I was a pretty good candidate for another mortgage (being non-dead)

“The guy I was talking to said that there was 100% down”

do you mean 100% of the rental income applying toward the loan? I’m not aware of any loans like that – I was happy to get 75%

I vaguely remember reading that the percentage has dropped to 50%

“Even at 20% down I would have to go hard money”

I always assume that hard money loans will be at least 18% interest – hard to imagine any property penciling out with that kind of loan

“anything would pencil until one to two years from now”

I expect rents in San Diego to drop from here – the price of multi-unit property is based on rents so I’m not interested in buying anything until I see what rents do – the soonest I will buy anything is 2011/12 and more likely 2014

“Do you know any brokers that are good at creative deals?”

look at your situation from the broker/lender’s perspective – no money down on a multi-unit property for somebody who (I assume) has never been a landlord – if you were in their shoes, how excited would you be to help you?

[4plexowner]

“So one could keep buying live in 4-plex’s over and over without going 35% down?”

according to my loan broker at the time, 1 year of owner occupancy was reasonable before buying the next owner-occ property – I followed this guideline and moved numerous times over the years – on at least one of the properties I provided the lender with a letter explaining why I was moving out of one owner-occ property and buying another one in less than a year – something along the lines of, “I thought I would enjoy living close to the beach but found the traffic and noise unbearable”

in hindsight I don’t think anyone really cared – the bubble was in full swing – lenders just wanted to close loans – evidently even dead people were getting loans so I was a pretty good candidate for another mortgage (being non-dead)

“The guy I was talking to said that there was 100% down”

do you mean 100% of the rental income applying toward the loan? I’m not aware of any loans like that – I was happy to get 75%

I vaguely remember reading that the percentage has dropped to 50%

“Even at 20% down I would have to go hard money”

I always assume that hard money loans will be at least 18% interest – hard to imagine any property penciling out with that kind of loan

“anything would pencil until one to two years from now”

I expect rents in San Diego to drop from here – the price of multi-unit property is based on rents so I’m not interested in buying anything until I see what rents do – the soonest I will buy anything is 2011/12 and more likely 2014

“Do you know any brokers that are good at creative deals?”

look at your situation from the broker/lender’s perspective – no money down on a multi-unit property for somebody who (I assume) has never been a landlord – if you were in their shoes, how excited would you be to help you?

[4plexowner]

“So one could keep buying live in 4-plex’s over and over without going 35% down?”

according to my loan broker at the time, 1 year of owner occupancy was reasonable before buying the next owner-occ property – I followed this guideline and moved numerous times over the years – on at least one of the properties I provided the lender with a letter explaining why I was moving out of one owner-occ property and buying another one in less than a year – something along the lines of, “I thought I would enjoy living close to the beach but found the traffic and noise unbearable”

in hindsight I don’t think anyone really cared – the bubble was in full swing – lenders just wanted to close loans – evidently even dead people were getting loans so I was a pretty good candidate for another mortgage (being non-dead)

“The guy I was talking to said that there was 100% down”

do you mean 100% of the rental income applying toward the loan? I’m not aware of any loans like that – I was happy to get 75%

I vaguely remember reading that the percentage has dropped to 50%

“Even at 20% down I would have to go hard money”

I always assume that hard money loans will be at least 18% interest – hard to imagine any property penciling out with that kind of loan

“anything would pencil until one to two years from now”

I expect rents in San Diego to drop from here – the price of multi-unit property is based on rents so I’m not interested in buying anything until I see what rents do – the soonest I will buy anything is 2011/12 and more likely 2014

“Do you know any brokers that are good at creative deals?”

look at your situation from the broker/lender’s perspective – no money down on a multi-unit property for somebody who (I assume) has never been a landlord – if you were in their shoes, how excited would you be to help you?

[4plexowner]

“So one could keep buying live in 4-plex’s over and over without going 35% down?”

according to my loan broker at the time, 1 year of owner occupancy was reasonable before buying the next owner-occ property – I followed this guideline and moved numerous times over the years – on at least one of the properties I provided the lender with a letter explaining why I was moving out of one owner-occ property and buying another one in less than a year – something along the lines of, “I thought I would enjoy living close to the beach but found the traffic and noise unbearable”

in hindsight I don’t think anyone really cared – the bubble was in full swing – lenders just wanted to close loans – evidently even dead people were getting loans so I was a pretty good candidate for another mortgage (being non-dead)

“The guy I was talking to said that there was 100% down”

do you mean 100% of the rental income applying toward the loan? I’m not aware of any loans like that – I was happy to get 75%

I vaguely remember reading that the percentage has dropped to 50%

“Even at 20% down I would have to go hard money”

I always assume that hard money loans will be at least 18% interest – hard to imagine any property penciling out with that kind of loan

“anything would pencil until one to two years from now”

I expect rents in San Diego to drop from here – the price of multi-unit property is based on rents so I’m not interested in buying anything until I see what rents do – the soonest I will buy anything is 2011/12 and more likely 2014

“Do you know any brokers that are good at creative deals?”

look at your situation from the broker/lender’s perspective – no money down on a multi-unit property for somebody who (I assume) has never been a landlord – if you were in their shoes, how excited would you be to help you?

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