Multi Fam: 30% down, + credit, 12-month expenses, NO JOB. Loans?

3 Replies

Hi All,

This is my first post. My husband and I began looking at multifamily here in Seattle but its just to rich for us. We are looking to move to the Midwest (around Madison, WI or Minneapolis, MN). We would like to live in a unit for a year or so as we get more acquainted with the surrounding area.  We prefer small town - but are not limiting our investment to that. We have never been landlords. Mainly looking for a 3/4 plex. However, recently I found a 5 unit that is very appealing, but understand that changes the funding options. Any recommendations on financing?  As we want to live in it, does that rule out portfolio loans? Will anyone look at the rental income as 'income' even at 50-60% without experience? I read somewhere that in some cases if you have enough savings on hand (6 months of expenses) income becomes less of an issue, any truth to that?

We are looking for house hacking and long term passive income. Also I am much more comfortable buying a multifamily vs SFH. In the event that we go back to Seattle, we wanted a multifamily investment property either way.

@Laura Baugh Finley

If the property is rented, lenders should be willing to use 75% of income as an add in.  Concentrate on local banks or credit union for residential loans if you pursue a duplex.  Without experience, I'd suggest a duplex personally.  You could get a commercial loan if you have the down payment but there are not fixed rate loans which is an issue to me.  Good luck

Hi Laura,

If you choose to come to Madison, I can connect you to an asset based lender.  Feel free to PM me if you want to talk specifics about the Madison market.

Thanks!

Brian

@Laura Baugh Finley

I would agree with Bruce that a duplex would be a good option for you on your first property and since it will be your primary residence for at least a year I would take advantage of FHA financing so you only have to put down 3.5% rather than 20-25% on traditional investment financing.

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