Have You Talked To A Local Lender?

Question

So I had a down payment saved up and I started to look on the MLS for a potential Cash flowing Property.  I went in thinking that I could do 20% down on a 30yr fixed rate on said property.  Since I don’t need a place to stay because we are happy to stay right where we are rent free. I wanted to start with an investment that is cheaper but still cash flowing such as an condo or apartment.  I spoke with many different banks since it was not owner occupied I would have to go up to 25% on a 15yr fluctuating rates .  This put a dapper on any cash flow potential I reached out but a lot of Credit unions or bigger banks prefer owner occupied situations. Any advice?

Joseph Firmin · Answer

@John Felix Perez - talk to a minimum of 5 lenders, including online lenders such as LimaOne. You can find a lender that meets what you need. If you are going to buy a condo/apartment/SFH - conventional with a conventional bank, you should be able to find 20% down and 30-yr fixed. A multifamily property going conventional will typically require a larger down payment. Definitely talk to local credit unions are part of your search. They are more flexible and keep the loans in house.

John Felix Perez · Answer

Good Afternoon @Joseph Firmin,

I took your advice and have been talking to multiple lenders.  I want to get started but, construction cost for material not to mention labor cost are so high right now.   We are going to move forward with a owner occupied small multi.  In search of at least 4/2 on one side to start.

John Felix

Chris Mason · Answer

"Rent free" is a no-go if you need the rental income from what you are buying to be "counted" in order to qualify. This is black and white, from both fannie and freddie, there aren't exceptions, and there's no one you can "talk to" about it if you want that sexy federally subsidized 30yf with that sexy rate, and all that.

Sign a lease with your family member (or whatever) for a couple hundred bucks a month. Pay exactly on time, via check, every single month, and give it a go in a year. Or, rent an apartment.

John Felix Perez · Answer

@Joseph Firmin thank you so much! Moving forward I will definitely talk to more than just local banks!  Stay awsome and thanks again!