Must ask questions when applying for your first Multi- fam loan.

Question

I will be applying for my first loan this month.  Looking at purchasing a Duplex or Triplex to owner occupy for the first year or two.  I have my list of questions for my loan officer but I was wondering if their are any questions I should focus on that an inexperienced investor should know about/ might not know to ask?

Isaac Boateng · Answer

@Brent Coombs thanks for the advice, I was thinking the same about some of the areas that some of these units were in but I'll keep doing my homework on them. Thanks again!

Brent Coombs · Answer

Put simply, paying $30k (on average) per door may actually be way overpriced!

Why should you or we think otherwise? ie. Keep doing that homework.

This is the sort of bulk deal that usually has lots of "dogs", and some not. (But which is which?)

If the seller won't let you "cherry-pick", then that would be a red flag to me. Welcome to BP...

Isaac Boateng · Answer

Hey, so I came across an investor who is selling his entire portfolio including some multi-family that all comes out to 64 units for almost $2million. I need to partner up with someone in order to be able to go for a deal like this. This would be my first deal but I'm not afraid to go big. I have started doing my homework on the properties and have been running some numbers. What are some thoughts on taking this step? What should I consider and expect?

Brent Coombs · Answer

@Rob Hannon, perhaps a better question to ask us is: What will the Lender be asking me? So before you even go, ask yourself: Will I have sufficiently good answers to: What's your provable income? Do you have your last 2 years Tax Reports? Who else will be on the loan? Can you afford to pay your mortgage (and mortgage insurance) if we take zero account of the income that you think you'll be getting from the other units? Have you got sufficient proof that you've been a good saver? (ie. Why might you be wanting/needing to only put down 3.5%?)

You get the idea. All the best. Welcome to BP...

Nicholas Lohr · Answer

FHA loan for sure. reduces the amount you have to put down.