Rental Property Investor · New York, NY · Member since 2020 · 100 posts · 93 votes
As the title says, I was pre-approved for an owner occupant loan in Chambersburg, PA! I plan to house hack so I am now looking for four unit multifamily properties. I'm really excited and just wanted to say thank you to the BP community.
Rental Property Investor · Boston, MA · Member since 2019 · 124 posts · 121 votes
5y
Congrats! Don't get hung up looking for a 4 unit. If you're in the 3 to 4 unit range, and your proposed loan type is FHA (assuming it is?) versus a duplex, make sure it'll pass the FHA self-sufficiency test. Also, FHA inspections are different (more stringent) than conventional mortgage inspections. Research FHA inspections and the main things that would potentially cause an issue (can range from missing handrail, to peeling paint, etc). Once under contract, a handrail is an easy fix for example versus correcting peeling paint) Some multifamilies listed for sale specifically note "No FHA buyers" because they know it won't pass the inspection and/or the seller doesn't want to remedy the issue that an FHA inspector would list on the report, vs a conventional appraiser would would not.
In the meantime, be careful taking on debt, opening up new credit cards, bank accounts, buying a new car etc as this could impact your credit score & debt to income ratio come time for the loan, and in turn could affect your interest rate / how much you can borrow. Best of luck!!
As the title says, I was pre-approved for an owner occupant loan in Chambersburg, PA! I plan to house hack so I am now looking for four unit multifamily properties. I'm really excited and just wanted to say thank you to the BP community.
Congrats! Time to start putting offers in! I'm not familiar with that market, but took a quick look in Propstream and came across 38 S 2nd St Chambersburg, PA 17201 - maybe something worth looking into? It's a 3 unit, but if the property and numbers work for you, don't get hung up on looking for a 4 unit.
Rental Property Investor · Boston, MA · Member since 2019 · 124 posts · 121 votes
5y
Congrats! Don't get hung up looking for a 4 unit. If you're in the 3 to 4 unit range, and your proposed loan type is FHA (assuming it is?) versus a duplex, make sure it'll pass the FHA self-sufficiency test. Also, FHA inspections are different (more stringent) than conventional mortgage inspections. Research FHA inspections and the main things that would potentially cause an issue (can range from missing handrail, to peeling paint, etc). Once under contract, a handrail is an easy fix for example versus correcting peeling paint) Some multifamilies listed for sale specifically note "No FHA buyers" because they know it won't pass the inspection and/or the seller doesn't want to remedy the issue that an FHA inspector would list on the report, vs a conventional appraiser would would not.
In the meantime, be careful taking on debt, opening up new credit cards, bank accounts, buying a new car etc as this could impact your credit score & debt to income ratio come time for the loan, and in turn could affect your interest rate / how much you can borrow. Best of luck!!
Rental Property Investor · New York, NY · Member since 2020 · 100 posts · 93 votes
5y
@Bradley Padula Thank you! I need to do my research between FHA and conventional. Just curious, would you use a real estate agent for your first deal? I did a lot of networking before getting this loan and I met a very experienced investor real estate agent.
Rental Property Investor · New York, NY · Member since 2020 · 100 posts · 93 votes
5y
@Greg Crider I also check out Shippensburg! However, I hear there are lots of vacancies because of new apartments being built and Ship U populations being stagnant.
@Bradley Padula Thank you! I need to do my research between FHA and conventional. Just curious, would you use a real estate agent for your first deal? I did a lot of networking before getting this loan and I met a very experienced investor real estate agent.
The HUGE difference between FHA and conventional for multifamily is FHA you can do as low as 3.5% down on up to a 4 unit property, whereas with a conventional loan you're looking at 15-20% down. You should talk about this with your lender and research online to learn more
I would recommend using a GOOD real estate agent. In regards to the investor real estate agent you mention, think of a list of questions to ask him / any other agent you may want to use. See how their online reviews are. Ask him, why should I use you / why do I need you?
On the buy side, it doesn't cost you anything to use an agent (they make money off the seller-paid commission, split between selling agent and buyer agent), so the thought is, why wouldn't you use an agent
If you don't use an agent, how do you get MLS access, how do you get lock box code to get into house for showing, how do you know all the documents and contracts and deadlines needed, etc etc. You need a professional on your side, and with that comes their experience, familiarity with the real estate transaction process, their network/knowledge, licenced realtors act as fiduciaries etc
Rental Property Investor · PA · Member since 2018 · 4 posts · 4 votes
5y
@Misael Carlos Vera
That’s right. It’s still a great long term market. It’s just a bad deal for anyone holding properties that are strictly set up for student housing. There is a good possibility some of these properties will become distressed and need dumped at a discount and them they could be turned into standard apartments...? Time will tell