I am in escrow for a Fannie Mae repo and on the forms it clearly stated that if I was not owner occupant and claimed I was then there could be a fine up to $10,000, plus prison time.
I was purchasing as a non-occupant, and marked that box, but the warning is on the form.
They can find out if you are really living there based on lots of things; what address is on your driver's license, where is your vehicle garaged on your insurance, the investor who lost out will drive by and verify and turn you in, what address does your employer have for you, where does your mail go, what address was your taxes filed with, what is your voter registration address, what address does your banks have, where do you have utility accounts, etc.
Owner occupants had 60 days to move in on the form.
Well thanks for all the feedback guys. To be clear, I didn't know where the issue landed on the continuum between some fine print clause that barely matters to the bank, and some big legal thing. Clearly the feedback is showing me that it's a big important legal matter, and now I know that. This was the point of the post. Couple people took it as an opportunity to make me seem like a jerk and thus virtue signal (such a big juicy temptation for people on social media these days). Anyways, thanks to those of you with constructive criticism!
@Lynnette E. Thanks for the response! That's interesting. I'm no longer even remotely interested in the hypothetical, but I'll keep posting devil's advocate. What if you changed all of your forms (mailing address, license, etc) but didn't move? What would be the evidence then? I'm also wondering if you move to the triplex and air b&b out the old house, but never changed those over to the triplex (mailing address, license, etc), could you be charged with not moving in even though you did move in?
@William Harrison I am, but I don't know if I could get my girlfriend on board with that. I might have to do private money or save up forever
@Pete Reed I'm new to all this and still trying to figure out if my risk tolerance allows for hard money loans
I think your best bet is to owner occupy for a year. You can rent or airbnb your other house. Or GF can stay in it.
Also, if you are a plumber you make decent money. Stop spending on frivolus things and start saving. If you desire to invest in RE it takes money. It really is amazing how fast you can save if you have the will to do it :)
I recommend AirBnB of your current home for a year or you could rent it out on a year lease. Since it’s your primary, I would make sure
you do an extensive background check on them.
I hear you on your GF probably not being on board with it, though. I’ve considered doing the same thing, but I know my wife wouldn’t go for it, so I never brought it up.
@Kirk P. get another job. Open you own business. Do something.
You don't seem like a problem solver to me and that is what it actually takes to get involved in REI not the 20% of a "nice place" or 100% of a turd.
Figure out how to make more money, legally, that seems to be your issue.
@Kirk P. . Even if your not able to save up the 20% you can always see if the owner wants to owner finance it to you. Most of the owners are used to receiving payments so getting payments with no phone calls is good for a lot of owners. You need to find the property and see what options fit. If it’s a good deal you can find the financing. Might not be great interest rates but it will still get u in the game. I understand you asking what if this and that. It’s always good to ask questions but best bet if there’s a law against it you shouldn’t do it. Good luck
@Kirk P. I think its a bad idea if you have to break the law to do it or to get other people to co-sign you breaking the law. I would suggest to do it the right way. Good luck!
@Mary Mitchell thanks for your tip. However, your assumption if me spending in frivolous things is unfounded. I work 40 hours a week for a plumbing company and do side jobs on many nights and weekends (to the point where it's alienated my friends). My house is 880 square feet, my car is a used 08 aveo that has manual crank up windows and manual locks and a gaping hole in the bumper. I rarely ever eat out. I quit alcohol 2 years ago. I quit cigarettes 8 years ago. I'm not even tempted to but frivolous things. It still would take me a long time to build up 20% of something in my area. So my options at this point are things like hard money, partners, seller financing, FHA, etc
@Earl Hatmaker Once again, I work a lot. And I don't do anything illegal. I was asking about a hypothetical situation that a successful investor floated to me to see if breaking that rule was a big deal, and found that it is. So I have no interest in doing it. I'm doing a bunch of things to try to solve a problem including this post, where I ask about a potential solution. So I don't think I've indicated to you that I'm not a problem solver
@John Hovanec Thanks! Good idea
@Timothy Paul russell Thanks
@Kirk P. I wasnt assuming anything, sorry if it came off that way. I was just suggesting paths towards your goals good luck :)
@Mary Mitchell Thanks Mary!
@Kirk P. Do a google search for “fha and real estate investors” scroll down and you will see a whole article about this topic under investopedia.
Get out of your area! I’m leaving Dallas for sake reasons & just as frugal!
Based on all of the replies I'm hoping @Kirk P. would not go through a plan like this and has learned the potential outcome of mortgage fraud.
Looks like you got some great advice as far as getting a multifamily. I say get the property and focus on using the two rentals to help pay the mortgage and insurance, live in the third for free and save money. I can’t say if you’d get caught if you rented it out before the one year end but i have colleagues that have done so within six months. No issue there.
@Kirk P. suck it up and move out of your house. You're going to have to be ok with being uncomfortable if you want to be successful. Move back in your house in a year.
People who try to find a way around the rules never make it in the long term.
@Dedrick Williams thanks
@Matt Millard Thanks. Yeah I've thought about long distance, but one of my strengths is that I know how to do plumbing and many other home building/ maintenance skills, so I think I'll make it work near me. And as far as moving, it's a good idea except that our day jobs are here and so is our families and friends.
@Michael Tripp Yeah clearly. Are my replies not showing up for anyone? I've mentioned like 6 times that I'm not doing it
@Jordan Moorhead Yeah I'm willing to move, but my girlfriend isn't. And if she's not on board, I'll just have to do some other plan. And yeah I had no interest in going around the law in any way
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