My offer was accepted!

[Hector Serna]

Hey guys, so if you guys go to my previous post, you’ll see that I was debating on whether or not taking on a 180k short sale, 1959 build, single family 3Bed 1bath, 1.9k mortgage as my first long term investment. The home needs approx 15k-20k in repairs. After all repairs are done, I’ll be able to rent it out at 1.9k-2.1k. Well my offer at 180k was accepted! 
Now hear out my plan. I’m currently making 80k+ gross income, I live with my parents who dont charge me rent (Nor want me to move out), and I have zero debt. Only bills I have are my parents electricity bill and phone bill (and always help pay for bigger projects around the house for example a boiler & sump pump we just installed). I was thinking of renting out the home and in addition to send $800-$900 to the principle in order to bring down the loan until I’m able to refinance at a better interest rate and get legit cash flow going.

What do you guys think of this approach?

[Travis Timmons]

@Hector Serna what Jason is referring to is that you seem to have made an offer and were approved for financing under the assumption that this will be owner occupied, not a rental/investment property. The lender/bank that approved the short sale likely assumes that it will be owner occupied and the terms, rate, and conditions of the loan will change if it is not owner occupied. Or the short sale will not be approved altogether unless it is owner occupied. You'll have to put 15-25% down - depending on the loan product/lender - and will pay a higher interest rate than an owner occupied loan. 

You're essentially pulling an accidental bait and switch on the bank and mortgage originator without knowing it. That's why Jason mentioned mortgage fraud. You have to disclose that you do not plan on living in the property and that it is an investment, non-owner occupied rental if that is what you intend to do. I may be missing some details or making incorrect assumptions, but that's the point that he and I were getting at.