I have a unique home purchase scenario which has led me to the world of portfolio lending. This will be my first home purchase so I am hoping to run a few questions by you. First, I'll give a bit of insight into the deal followed by the MAIN QUESTIONS toward the bottom. I so greatly appreciate any experience, thoughts, concerns, advice on this situation.
About the Property
Corner lot on a dead-end street. 4-acre property with a beautiful 2400 sq. ft home on it, along with a detached mobile home which brings in $850/month in rent. I am drawn to the property for 4 reasons:
- The home and land are beautiful in an area that has a good amount of positive momentum building around it. I'd be proud to call the house and town my home.
- The home and land have great STR potential for days that I am off-property (I travel quite often for work and am extremely minimalist in material possesions. I'm very familiar with hotels and short-term rentals, and would live in the home as if it were an operating STR business)
- The mobile home has a great rental history, is updated, and seems fairly low maintenance. The $850/month covers the property's taxes + insurance and a good portion of the main house's utilities
- The asking price, in my opinion, does not factor in the worth/rental-income of the mobile home. If the mobile home did not exist, the home would still comp conventionally at asking price.
About the Financing
The mobile home has made financing tricky. Conventional lenders will not loan on it because it is a single-wide. It IS on a foundation, but even lenders that would go that far backed down once they heard single-wide. Apparently, Fannie Mae and Freddie Mac get very confused with properties that have traditional homes and mobile homes on them together.
As such, I've been pointed to several portfolio lenders. One local lender seems very forward-thinking and has offered me a 30-year loan with 10 years at a fixed rate. To my knowledge, this is referred to as a 10/1 ARM
- How does the community feel about portfolio loans in general? Anything particular worth noting?
- The presented 30-year portfolio loan product has 10-years fixed at 3.25% (whereas 30-year conventional is 3.75% in my market). I definitely plan on staying for at least 5 years, and am not necessarily married to owning the home for the entire 30 years. I realize an ARM like this can be beneficial if one is open to selling/refinancing prior to the fixed-rate period ending. I'm just not sure how refinancing might go considering the difficulties with financing to begin with, due to the mobile home.
- Are adjustable-rates from portfolio lenders bound by anything? Are these at all relates to FED Rates? Or can I expect the complete unexpected come year 11 (when the fixed-rate is complete)? I'm pretty worried about this as if I can envision a local portfolio lender sinking their teeth in once that fixed rate period concludes.
- Anybody have any tips on mobile home financing/re-financing in general? It may be different due to the fact that the property is not exclusively a mobiel home, but a sort-of multifamily property.
- Do ARMs from portfolio lenders affect future lending in any considerable manner? ie. if in the future I were to approach a bank with a conventional loan for an investment property, would I be considerably tougher to approve with my portfolio ARM (as opposed to if this were a conventional loan).
- Any advice on how one would approach this longer-term? Again, I'm not sure how refinancing would look given how tricky financing already has been. Maybe remove the mobile home around year 9-10, refinance to a conventional loan, or even put back on the market then?
Thank you all so much in advance for your time and help. Wishing the entire BP community success and happiness in its collective endeavors