Million dollar plus loan help!

11 Replies

Hello all! I found a 4 family in a very upscale part of St Louis and they are wanting $1.2 million for it. Any advice for acquiring loans of this size would be very helpful. I make $85k a year salary and have a good credit score. I’d love to land this building but don’t know how to even approach something of this magnitude. Any advice is well appreciated!

So you're looking at best case 25% down. More likely 30%. If non-owner occupied. It's a residential loan so your income will be used. Same DTI calculation you would use to buy your house or 200k duplex, just a larger loan amount.

You may need to move into one unit. Otherwise you need 25% down. You may get a lot of no, but keep shopping for a yes.

@Matt Hoyt @Anthony Dooley sorry I should have mentioned I would be an owner occupant and live in one unit. Also I’m more wanting to know if there is any good way to approach maybe a private investor for something like this or if traditional loans would be best bc I’d be able to take advantage of the 3.5% down payment. I don’t have the $42k down payment liquid right now though as a good amount of my savings are tied up in stocks. So was hoping there was possibly some creative ways to get this deal done

@Anthony Dooley somehow I doubt FHA loan limit is 1.1 mil in St. LU

I think it tops out in the sf Bay area at 800k or so.. and most places around the country 400 to 425k max.

so I think this person will need full down payment and maybe his eye are bigger than his wallet .

this is a perfect set up for parents or family to step in and help.. would not make much sense for other investors..

@Jay Hinrichs thanks for the advice! Maybe I’ll just see if I can get private loans for the down payment first and then worry about proceeding.

@Cory Spitznagel

Check out the 2018 confirming lending limits for your county here: https://www.fhfa.gov/DataTools/Downloads/Pages/Con...

Click on the PDF for the table and you should be able to do a word search for your county. I belive your conforming limit for a 4plex is right around $750k for your county. 

If you are a veteran you could get a jumbo VA loan and pay zero down for the conforming limit amount and 20% on the difference (all assuming this is a primary residence).

@Jay Hinrichs had great advice - pull a family member into this and get them to gift you the down payment! 

Best of luck! 

Originally posted by @Jonathan Pflueger :

@Cory Spitznagel

Check out the 2018 confirming lending limits for your county here: https://www.fhfa.gov/DataTools/Downloads/Pages/Con...

Click on the PDF for the table and you should be able to do a word search for your county. I belive your conforming limit for a 4plex is right around $750k for your county. 

If you are a veteran you could get a jumbo VA loan and pay zero down for the conforming limit amount and 20% on the difference (all assuming this is a primary residence).

@Jay Hinrichs had great advice - pull a family member into this and get them to gift you the down payment! 

Best of luck! 

that's cool I did not realize FHA went higher on 4 plex's... guess you can tell I don't broker a lot of real estate these days. man this is what everyone starting out who can stand to live in a 4 plex should do for one year.. use one mortgage slot buy 4 doors.. live there a year then move on.. refi and use the fha loan again or leave it in place and go conventional on the next one..

@Jay Hinrichs

Yeah, it's an amazing deal and the leverage is awesome. For some reason it is not talked about a lot and lenders never really push it. It gets even better if you are a Veteran cause you can do the full conforming amount without paying PMI and if you go Jumbo you only pay 20% of the difference down. Win, win.

@Jonathan Pflueger   is the trout farm inn still up and running?.. when my dad started in real estate mid 60s they were selling lots out by loch Lomond lake and the weekend office was at the trout farm inn.. we used to swim in the pool all weekend while my dad worked.. :)  Oh the good ole days.

yup I did not realize FHA went past the SFR minimum when you buy doors.. now I know why a 4 plex in PDX does not last 2 hours and sells for what they sell for and duplex's as well.. bet a lot of them are house hacks.. but for young couples or single starting out seems like a pretty reasonable way to start when you have a good job credit but not a huge down stroke.. compared to buy a low end rental way out of state.. I would buy the local multi in a heart beat as first priority get that locked up then go shopping.

@Jay Hinrichs

Ha! The Trout Farm fell into disrepair the last 10 years or so but a local investor has since purchased it and is restoring it to its former glory. Small world for you to know about that! Those lots out by the lake have appreciated a lot since those days, wouldn't have minded to have picked some up back then - well my dad would have needed to do that I was most likely in diapers :-). 

If you are ever in the area I would love to grab a beer sometime at the Farm and talk Real Estate, I follow most of your posts and appreciate your insights. I am just beginning my investing career here and so far its been an amazing and lucrative journey - 3 doors and hundreds more to go!

@Jonathan Pflueger   especially when the lots sold for 990 to 2900 each :)  guy named George Triphon bought a thousand of them at tax sale.. he did that is Lake co also..

made millions in the land game in the 60s.. that was my incubator watching those guys work.. and listening to how they closed the deals.. :)

Not sure when I would get down that way next been a few years.. I have a friend that lives at Pasa.

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