New Investor In the California Area!

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New Investor In the California Area!

Syed-Shawn Azam
Rental Property Investor · Fort Myers, FL · Member since 2016 · 15 posts · 23 votes

(Sorry to some as this is a repost, I posted it in the wrong Forum originally)

Hi All,

I want to start this conversation out by explaining a little bit about myself and my goals, and hopefully through that I can spark a few conversations and get to know a few people here on this site! My name is Shawn and I am 23 currently working within my Family's business and working my way up to management. I initially went to a community college in the Sacramento Area and transferred from there to UC Berkeley in the San Francisco area where I studied nuclear engineering. Now I have always had an entrepreneurial mind, but I also had a fascination with mathematics and the sciences. While I was going to school I began to work within the company and shortly after being there I was already one of the top producers within the company and already making more than I would have if I stayed in school a few more years. With this being the case I proceeded to continue on within the company and have been able to travel to Europe for a few weeks and have proposed to my now Fiancé while we were there. I am now looking to invest in real estate and I am in a perfect position to pick up my first property in the Sacramento Area, specifically the Roseville Rocklin area.

This is the situation I am in: Because I am working in the Family company I will be traveling all over the United States and will be as far as Florida from here for a few months at a time. With that in mind, my Fiance will be staying in the Roseville Rocklin area and I have proposed to her of buying a Multifamily property that I can use as a "Primary Residence", that her and her sister can stay in while I am traveling. This will allow me to take out an FHA loan on the property and rent out the other units to help pay for the rent, as well as take in some rent from the soon to be sister in law. As well, my soon to be father in law, Bryan is a licensed contractor and wants to get into the real estate game with repairs on properties and flips, so for me this will jus tbe the beginning of hopefully a long investing career!

What would really help me out right now would be some pointers as to potentially good agents in the area as well as some potential advice from investors in the area who are either into flipping properties or into buy and hold multifamily properties.

With all this being said, I would like to continue this conversation below with others either like me or who have been in my situation, or who honestly just want to say hi and potentially gain a new investor friend here on the site and potentially in person!

Best Regards,
Shawn Azam

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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
9y

Hi @Syed-Shawn Azam,

Welcome, go Bears, and grats on the engagement!

Be careful with that term "primary residence" being in air quotes. Typically what happens is that you get away with occupancy fraud once because underwriting doesn't scrutinize your docs post-close. Then, next time, when a new underwriter reviews all your docs, she figures out that you committed mortgage fraud last time, and your goose is cooked - and not necessarily just for this next mortgage, but forever. It's typically pretty obvious.

If you aren't going to establish the property as your primary residence for at least 12 months, within 60 days of close, don't call it a primary residence and commit mortgage fraud.

@Account Closed can tell us a little bit about that area.

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  • Dani Beit-Or
    Investor · Irvine, CA · Member since 2009 · 259 posts · 183 votes
    9y

    Hi, 

    You live in a great area (I used to live there) but it so happens your intimidate area so super-expensive to buy or to make financial sense, even Sacramento is making less fin. sense these days. 

    But, since you travel the US is open you w/ an ease. 

    I had lived for 10+ years in the bay area but have been investing in multiple metros around the country long before moving the the Bay Area and still do. 

    Live where you want to live and invest where it makes sense. 

    Good luck and I'll be happy to further help if you have more specific questions. 

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    9y

    Hi @Syed-Shawn Azam,

    Welcome, go Bears, and grats on the engagement!

    Be careful with that term "primary residence" being in air quotes. Typically what happens is that you get away with occupancy fraud once because underwriting doesn't scrutinize your docs post-close. Then, next time, when a new underwriter reviews all your docs, she figures out that you committed mortgage fraud last time, and your goose is cooked - and not necessarily just for this next mortgage, but forever. It's typically pretty obvious.

    If you aren't going to establish the property as your primary residence for at least 12 months, within 60 days of close, don't call it a primary residence and commit mortgage fraud.

    @Account Closed can tell us a little bit about that area.

    1Reply
  • Syed-Shawn Azam
    OP
    Rental Property Investor · Fort Myers, FL · Member since 2016 · 15 posts · 23 votes
    9y

    Hey Chris,

    I definitely see what you are saying. What I meant by using air quotes is that I will have this property as my primary residence and live in it when I am in town and in the area, which should be most of the time. But since I will be traveling for work I may not necessarily be living directly in it all the time, and may be in Florida for a month or so here and there. But I definitely plan on keeping it as my primary residence for the full year and then decide after that to rent out my unit or potentially sell the property.

    But thank you very much for the heads up, I definitely don't want to commit any fraud and that is part of the reason I want to bring the idea up first so that I make sure I am going about it the best way!

    On that note, if I were to lets say, rent an apartment in florida to stay at when I am down there, will that take away my primary residence or is that okay as I am only using it when I am working?

    Best Regards,
    Shawn Azam

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    9y

    Hi @Syed-Shawn Azam,

    That scenario actually sounds like a good candidate for a primary in CA, and a 2nd home in Florida. 

    Second homes can be places that you stay at part of every year, that are also furnished rentals part-time (airbnb etc).

    Second homes have better interest rate pricing and lower down payment requirements than investment properties.

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  • Syed-Shawn Azam
    OP
    Rental Property Investor · Fort Myers, FL · Member since 2016 · 15 posts · 23 votes
    9y

    @Chris Mason,

    I actually never thought about that! With it being a second home what would I be approximately looking at as far as down payments and rates go?

    Also, I looked a little more onto your profile and saw that you specialize in loans for people who may have tricking income sources. It would really help me if I could ask you a few questions as I am currently looking to get prequalified right now.

    My question is that with the field I am working in about half or more of my income comes from commission based pay. Not sure if I should talk about specifics but lets say that I make X from salary every month and once I finish all my paperwork for the prior month I usually get X to 2X more in commission. Now with this commission I make six figures, but my question is how do I properly show that? As well, as of 3 months ago I got an increase in pay of about 25%, how would I go about showing that, or do you think that shouldn't matter too much?

    And my last question for you is, personally for my first home, what do you think would be the best option for prequalifing a loan. Should I go to a conventional bank that I use for month of my expenses? Or should I try to find a mortgage lender, like yourself, and have them help me get prequalified? Would someone like yourself be able to look at multiple different lenders and find what is best or would you just use one source?

    Best Regards,
    Shawn Azam

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