Hello all, I have a question I would appreciate your insight and advice on. We have found a house in Orem that has a legal accessory apartment (2 bed 1 bath) attached to it. Our plan is to live in the attached apartment and rent out the main house which is 4 beds 2 baths. This way we'd be living just about rent free allowing us to save more of our income to use for future deals. We just heard back from our lender that because it's not classified as a duplex that they can't count future rents and so they won't lend on it. I'm wondering if anyone has worked with any lenders who could work with this?
We're just starting out and based on the numbers it looks like a good deal for us. But I'm worried we won't find a lender who would lend on this property.
Thanks for your help.
Investor · United States · Member since 2015 · 415 posts · 487 votes
9y
I think you could find a lender who will count the future rent income, but they always require you to have a signed lease to prove it. That turns it into a chicken-egg problem. You need to be under contract in order to sign a lease with a tenant, but you can't get under contract unless you're pre-approved.
I would spend an hour calling 5 different local banks and see if they think they can help you. If they can't, your other option will be to find a co-signer.
Investor · United States · Member since 2015 · 415 posts · 487 votes
9y
Try asking the lender if the current owner gets a signed 12-month lease in place that will carry over into your ownership, if they would count that. Probably gonna have to get creative.