Realtor · Fall River, MA · Member since 2015 · 82 posts · 16 votes
Hi Everyone,
I am working on my first deal. I got the property under contract. It is 3 units in Worcester county, MA and it is a HUD deal. Financing through FHA 203k. I don't have all the money for downpayment and closing costs I have been told I need to get a gift from a relative.
What should I do, how I can get through it. Anyone has advice or insight for me please?
Investor · Boston, MA · Member since 2015 · 398 posts · 147 votes
10y
Did you get pre-approval at least from a bank? How did the seller accept your offer without a way to finance the purchase? When you got pre-approval from the bank they would have asked how you have the downpayment, did they not? Sounds like you might not be able to close the deal!
Realtor · Fall River, MA · Member since 2015 · 82 posts · 16 votes
10y
Thank you Russ for taking the time to respond to my questions. I asked how I can get through it and If anyone has suggestions and ideas. There is always a way.
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
10y
3.5% down isn't going to work if using gift funds for FHA on multi unit.
FHA guidelines are a nightmare to search through, but IIRC you're looking at 15% down if a single dollar is gift funds and it's a multi-unit and you want to use FHA.
Realtor · Fall River, MA · Member since 2015 · 82 posts · 16 votes
10y
Hello Chris .
My lender did not say anything about 15% should I use whole amount received in a form of a gift.. I ll do my research. Have you done FHA ? May be MA is different?
How does Fannie May home style renovation loan works?
Real Estate Investor · Abington, MA · Member since 2011 · 356 posts · 114 votes
10y
@Darina Pogodina what is your end goal with the property? Do you plan to flip it? Live in it? What are the numbers on the deal? With more information people can offer better advice.
Realtor · Fall River, MA · Member since 2015 · 82 posts · 16 votes
10y
Thank you Paul.
I got it under contract for 91K
I plan to live in one of the units and rent the other two. I will collect approximately $2000 - miss 35% of operational expense. So , after all, I will see 10% cap rate which will be about $15,000 in newt profit.
I have to come up with about $14,000. I have 20% right now.
So, what are my options?
I am going to hold the property for a while, at least I plan on that, depends on market condition and other aspects.
Should I flirt in the future, the offer should have been lower.