Real Estate Agent · Portland, ME · Member since 2024 · 10 posts · 5 votes
Hey everybody! I'm a new real estate agent in the Portland, Maine area. I'm full time as a real estate agent and also work 1099 as a carpentry apprentice on the side. I'm looking to buy my first property as a house hack ideally a 3 or 4 unit, and I have what could be a 3-5% down payment saved right now. I have a good credit score, but I'm concerned that given I'm going to have very low provable income for the next 2-3 years and not be able to secure a loan especially with a low down payment. I'm aware of seller financing as a possible option and will be on the lookout, but it certainly dramatically lowers my deal pool in an already incredibly competitive market. I'm wondering what other types of creative financing or loan products might be available for my situation. I'm ideally looking to avoid a partner, although I know that's probably one of the top options.
Rental Property Investor · Mebane, NC · Member since 2015 · 494 posts · 439 votes
2y
I'd recommend reaching out to a bunch of local lenders to tell them what you're looking for and your situation. They'll let you know if they have a product you currently qualify for, or what you'll need to do to qualify.
Anecdotally, I feel like personal residences are very easy to qualify for. If it's a multi-unit you could try a DSRC loan. If you don't already qualify, the answer may be you need to save a larger down payment, look for a cheaper property, or wait a few more months to build longer credit history.
Good luck and don't forget to save a beefy emergency fund!
Realtor · Portland, ME · Member since 2015 · 656 posts · 552 votes
2y
@Jesse Brooks partner/cosigner will definitely be your path of least resistance. Another option that I've seen in the local market is purchasing a heavily distressed or big rehab project with a local hard money lender that will allow a smaller downpayment due to the amount of equity in the deal on the back end. Purchase, rehab, rent it out and then refi with a commercial mortgage. For this to work, you'll need at least 20% equity in the property on the back end through your forced appreciation on the rehab. Many HML may not do 3-5% down but if you could save up a little more, maybe 10%, it could fly. You may also be better off looking in some less expensive markets in ME like Augusta or L/A for these types of deals since your downpayment will stretch a little farther.
@Jesse Brooks partner/cosigner will definitely be your path of least resistance. Another option that I've seen in the local market is purchasing a heavily distressed or big rehab project with a local hard money lender that will allow a smaller downpayment due to the amount of equity in the deal on the back end. Purchase, rehab, rent it out and then refi with a commercial mortgage. For this to work, you'll need at least 20% equity in the property on the back end through your forced appreciation on the rehab. Many HML may not do 3-5% down but if you could save up a little more, maybe 10%, it could fly. You may also be better off looking in some less expensive markets in ME like Augusta or L/A for these types of deals since your downpayment will stretch a little farther.
Interesting seems like a tricky strategy for a first investment but could certainly work out if done adeptly. Will consider. Probably I'll have to bite the bullet and get a credit partner. Thanks for the input.
I'd recommend reaching out to a bunch of local lenders to tell them what you're looking for and your situation. They'll let you know if they have a product you currently qualify for, or what you'll need to do to qualify.
Anecdotally, I feel like personal residences are very easy to qualify for. If it's a multi-unit you could try a DSRC loan. If you don't already qualify, the answer may be you need to save a larger down payment, look for a cheaper property, or wait a few more months to build longer credit history.
Good luck and don't forget to save a beefy emergency fund!
I've thought of that, I suppose it couldn't hurt to ask. Probably don't have enough for DSCR downpayment, but I suppose I can just stay poised and save. Thanks for the input.