Investor · Lansdowne, PA · Member since 2016 · 161 posts · 62 votes
Hi, everyone,
Subject deal is both halves of a large twin. MLS lists it as 4 apartments and 1 (unoccupied) office and says "This listing includes 123 & 125 Steet Ave, twin building (Tax ID XXX and YYY). To be sold a bundle." Each half has it's own listing in the county database and both say "Property Type: Residential"
I've seen some references to residential being "1-4 living units" (which wouldn't include the office) and I haven't found the actual HUD wording on the subject. Can someone tell me or point me to the exact criteria? Does it depend on how it's actually being used (e.g. the office isn't occupied now)? How it could be used based on the layout (e.g. existence of bathroom and kitchen)? Is it a moot point because it's actually two properties?
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
10y
It sounds to me they are residential and probably would qualify for conventional financing based on the classification in the tax records. Technically it sounds like a mixed-use but appears not to be classified as such.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
10y
It sounds to me they are residential and probably would qualify for conventional financing based on the classification in the tax records. Technically it sounds like a mixed-use but appears not to be classified as such.
Investor · Lansdowne, PA · Member since 2016 · 161 posts · 62 votes
10y
@Joe Splitrock Thank you for the input! I'm thinking it would be great to get into this property with a residential loan, possibly even an FHA loan to reduce the out-of-pocket, but that's another part of my story. You don't happen to know where to find the exact definition, do you?
Investor · LaGrange GA · Member since 2014 · 121 posts · 55 votes
10y
It would probably depend on if the 'office' is attached to the other units and could be considered as one of them or not. If it's a stand-alone office, you're likely going to have push-back from the bank, as they could see it as a 5 unit. I would meet with a banker and discuss, you could always suggest that you'll re-attach the office to a unit so that it's part of that unit.
The bank may also have issues doing one loan for two properties. I would almost bet on that. Your best answer is going to come from your potential lenders... start talking with them to see what their criteria is.
If it's coming back as a commercial property, perhaps hard money could be used to close and convert it to a 'conventional' property before refinancing with a traditional institution.
Investor · Lansdowne, PA · Member since 2016 · 161 posts · 62 votes
10y
@Matt Vogt Thanks. I had mulled over similar possibilities but couldn't quite tell if I was just making stuff up as I went along ; > I haven't been in the property yet, but it looks like the 4 apartments are on floors 1 and 2 while the office is in the basement/garage of one unit and the other unit still has a garage.
Might this be another situation where talking to a portfolio lender who's not beholden to loan conformance would be the best bet?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
I think the more relevant fact is that these are two separate properties. You can Not buy them both, using an FHA. You can't owner occupy two properties, it's not the same as a 4 plex which is one propert/legal description. For conventional, I also sure one could be your primary, the other would be an investment property, since again you can't owner occupy two separate properties. The "office" is probably a non issue.
Investor · LaGrange GA · Member since 2014 · 121 posts · 55 votes
10y
I suppose you would need two separate loans; one for the rental property and one for the residence. At that point, you could try for a conventional loan (say at 5%) or an FHA for the one, and a conventional (20 or 25%) for the 'investment' property. Either way, you're going to need around 25% of asking to be able to acquire both.