What to do when my pre qualification/ approval just isn't enough

9 Replies

Hello outside world --- My name is lance and i am currently living in NYC  i am looking to purchase my first house to househack (live in and rent out other rooms to tenants). I already have a pre-qualification from Bank Of American for $450,000 how ever multifamily homes are going to about $700,000 and that just isn't enough. My question is  should i put 20% down on  on a multi family property out of state that would cash flow from day 1 or should i just get into a single family here in NYC and house hack it. i am looking to buy and hold for the purpose of cash flow and networth building 

WILLING TO GET ADVISE FROM ALL INVESTORS BIG OR SMALL !!!

Originally posted by @Lance Francis :

Hello outside world --- My name is lance and i am currently living in NYC  i am looking to purchase my first house to househack (live in and rent out other rooms to tenants). I already have a pre-qualification from Bank Of American for $450,000 how ever multifamily homes are going to about $700,000 and that just isn't enough. My question is  should i put 20% down on  on a multi family property out of state that would cash flow from day 1 or should i just get into a single family here in NYC and house hack it. i am looking to buy and hold for the purpose of cash flow and networth building 

WILLING TO GET ADVISE FROM ALL INVESTORS BIG OR SMALL !!!

 I've always felt investors should get home base taken care of first. I recommend buying the roof over your head before spending any money out of state. Stack that cash until you've got enough to buy one of those 2 units for $700k. That's going to be a big start of your nest egg later in life while placing a roof over your head now.

@James Wise   i was speaking to my mother about actually getting a home for myself here in new york before i start investing elsewhere and u think i should weather the storm some more until i can afford something bigger. thank you for taking the time to  respond

@Curtis Rouse Jr : I will check your website out. What i need  to do is research the best markets to rent in with decent property value. Then i think i would just pull the trigger and move randomly to start my future, It would have to make sense. once i get stuck at some point in the home buying/ investing process i will reach out hopefully your help is still available then. thank you for taking your time to respond. 

Just to give you the opposite side of things I believe your own home is often a liability and a major hindrance to generating wealth. 

Renting allows you to live where you want for a fraction of the cost of ownership.
Build wealth and cashflow through an investment property now then buy your own home later on.  Of course if you can do both in the sense of living in something you own and generate income out of it then that's the holy grail but it sounds like that ain't happening where you want to live so, but elsewhere in a capital growth market and rent for now.

When you get a loan for a multi from a bank that does multi loans they will count part of the rental income towards your income for the loan, so if you can find a 3 or 4 family you will be approved for much more than a single family

@Dean Letfus i wouldn't mind living in a small room inside of my home,  i am single with no children and do not need a lot. I have been looking for the holy grail the only way this makes sense for me is by house hacking in something that cashflow at worst case scenario i am just looking to at  live rent free. (i am willing to move anywhere if it makes sense financially and safe

@Lance Francis

I would consider a 2 family with FHA if you do not have a large down payment. As mentioned you should be able to count the rental income from the other unit as well.

In NYC and other high cost areas, FHA can be difficult because of the self sufficiency rule which applies to 3-4 units. Rents typically aren't high enough at 75% to meet the ratio of covering 100% of the mortgage.

Home Possible has a low down payment option for multi-family properties as well, if you can find an area nearby that you would like to live and it is in one of the no income limit areas.

There are some portfolio options that I am aware of with low down payments on MFR if the properties that you are looking at are above conforming limits, and you were able to meet the other qualifications.