Physician Loan (100% financing, No PMI, 3.5% interest, 30 yr)

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Physician Loan (100% financing, No PMI, 3.5% interest, 30 yr)

Darsh Kumar
Member since 2019 · 12 posts · 1 vote

Hello!

This is my first potential deal but fortunately, I am in a unique position to potentially qualify for a physician's mortgage since I'm in the healthcare field. This specific loan entails 100% financing, no PMI, 3.5% interest for a 30-year fixed loan. The limit for the loan is $510k.

My plan is to house a single family home but would like advice on how to approach this unique opportunity. Would anyone recommend purchasing a bigger house for a higher purchase price or a biggest house I can get for the cheapest price? Or is there another scenario that you might recommend?

One scenario: My thinking is that if I potentially purchase a 5Bed & 4Bath (for about $300k) and house all the rooms except one (which is where I'd live), then I might be able to get pretty good cashflow if i rented each room for at least $500 especially if the mortgage will be just under $2,000.

Another scenario: 5Bed & 4bath for $450k and house hack the same way.

What are your thoughts? Thanks! Help greatly appreciate!

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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
6y

If you don’t want to put your location in your profile (preferred), you should at least say at least what state, or better yet the city you’re thinking of. It will help people with local knowledge and advice. It will also help to know if that city/state is pro/against house hacking, tenants, landlords, etc. 

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  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    6y

    If you don’t want to put your location in your profile (preferred), you should at least say at least what state, or better yet the city you’re thinking of. It will help people with local knowledge and advice. It will also help to know if that city/state is pro/against house hacking, tenants, landlords, etc. 

    2Reply
  • Darsh Kumar
    OP
    Member since 2019 · 12 posts · 1 vote
    6y

    @Bill Brandt oh, thank you.

    I am in the Wichita, Kansas area

    0Reply
  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    6y

    Good. Not m=any area I know anything about but anybody who has the keyword Wichita will be alerted to your post. Hopefully one of them will chime in. GL. 

    0Reply
  • Ariel Nixon
    Accountant · Wichita, KS · Member since 2018 · 11 posts · 3 votes
    6y

    From my experience in the Wichita market I don't know if you will have luck with this strategy. Since housing is fairly affordable in this area, individuals can find their own place without a shared space at a similiar price. To me this seems like a risky move for the area, but maybe I'm more risk-adverse than some! Good luck. 

    1Reply
  • Fidelis O.
    Rental Property Investor · Toledo, OH · Member since 2018 · 38 posts · 10 votes
    6y

    @Prashan Shanthakumar

    Unless you are renting to students I think it’s going to be extremely difficult to rent out rooms individually. I tried it before myself and found out people just want their space. You’re better off buying duplex/tri/quad. Then live in one unit and rent out the others. There are few lenders that will finance a multifamily unit on a physician loan. I have personally done it however you must live there for at least 12 months. Google semi-retired MD - He has a good post about this published just 2-3 weeks ago.

    Good luck

    1Reply
  • Colton Marx
    Rental Property Investor · Wichita, KS · Member since 2018 · 5 posts · 1 vote
    6y

    We used to rent out an individual room in our house for multiple years and never seemed to have a problem finding a new tenant. If its priced respectively I dont think you'll have too hard of a time. We live in the outskirts of Wichita

    0Reply
  • Darsh Kumar
    OP
    Member since 2019 · 12 posts · 1 vote
    6y

    @Ariel Nixon thank you for the advice. This is definitely new to me so I appreciate any help I can get

    0Reply
  • Darsh Kumar
    OP
    Member since 2019 · 12 posts · 1 vote
    6y

    @Fidelis Obu thanks a lot for the heads up. Will definitely check out that post!

    0Reply
  • Darsh Kumar
    OP
    Member since 2019 · 12 posts · 1 vote
    6y

    @Colton Marx thanks for the advice! What have you found to be the most effective way to find tenants?

    From what I've read, craigslist & Facebook marketplace seems to work well. Are there any other options? Especially in the Wichita area? Thanks!

    0Reply
  • Colton Marx
    Rental Property Investor · Wichita, KS · Member since 2018 · 5 posts · 1 vote
    6y

    @Prashan Shanthakumar no problem, it actuality it was my father who owned the home and he was in charge with finding the tenants, but to my understanding he used craigslist the most and I would say was his greatest tenant generator. They have recently stopped doing the traditional renter and now use airbnb for a weekend or 2 a month, but as you know about Wichita, unless you live in the downtown area or near the airport you may not have the greatest luck with Airbnb. Wichita doesnt have the greatest of attractions

    0Reply
  • Darsh Kumar
    OP
    Member since 2019 · 12 posts · 1 vote
    6y

    @Colton Marx awesome!

    Once I get my feet wet, would love to meet up and hopefully work together on some deals in the future. Appreciate the help!

    1Reply
  • Colton Marx
    Rental Property Investor · Wichita, KS · Member since 2018 · 5 posts · 1 vote
    6y

    @Prashan Shanthakumar anytime! Let us know which direction you end up taking! Would love to hear the outcome

    0Reply
  • Shane H.
    Investor · Wichita, KS · Member since 2015 · 769 posts · 279 votes
    6y

    @Darsh Kumar

    Have you lived in Wichita very long?

    For $500k that'd almost put you at the top of the market - when you go to sell your house you'll have a helluva time getting rid of it.   From what I've seen and I'm sure some realtors can chime in - but I'd spitball anything $200k and lower is prime as there just isn't much to choose from (if you are thinking about resale and how fast you can move later on as most Dr's it seems like complete their residency in town ... if that's what you're doing....then move shortly thereafter)

    Anyways if that's the high end of your budget you have the pick of wherever you want to live.

    I did the whole roommate situation - but will tell you this - as someone pointed out - Wichita is fairly affordable so IMO having done the roommate situation there  here's my perception.

    You either need to offer a KICKAxx space (which a $500k house would do) to get a roommate or it needs to be pretty affordable - or a combo of both.   If you have a 5 bedroom house even in a $500k house I do not think it is even conceivable that you would rent all the rooms - I'd only bank on one or two roommates - and since Wichita is what I'd call a little big town - most people aren't going to want to live with someone they really don't know.

    I think you're most realistic situation is buy a very nice duplex (there are a few from time to time that are high end) that will come for sale - live in one half and rent out the other where they should make  a vast majority of your mortgage payment and live for nearly free.

    Secondly - buy an affordable house (if your intent is to move in a short time span so below $250k or so) and then only bank on having one or two roommates and only charging them $750 or less depending on how nice the place is - unless you have a large base of friends that are willing to live with you.

    Just my .02 -- and best of luck!!!    (Also pay attention to the school system if you plan on moving a house for resale later and moving away - Maize, Goddard, Andover are probably going to be the most sought after school districts -- any house in those districts under that $250k or maybe 200k price point and is "move in ready" and updated will MOVE quick - so be ready to look at and place an offer the same day.  I dont think that aspect of the market has changed.   There's plenty of 4 and 5 bedrooms in that price point or maybe something with an unfinished basement that you can later have finished.

    1Reply
  • Shane H.
    Investor · Wichita, KS · Member since 2015 · 769 posts · 279 votes
    6y
    Originally posted by @Darsh Kumar:

    @Colton Marx thanks for the advice! What have you found to be the most effective way to find tenants?

    From what I've read, craigslist & Facebook marketplace seems to work well. Are there any other options? Especially in the Wichita area? Thanks!

    Don't use craigslist - it became irrelevant a couple years ago - it's full of spammers and scammers - 

    Hotpads, Zillow, trulia Facebook marketplace and your friends network, apartments.com etc - those are places you'll have better luck - 

    Also set up an AirBnB account - depending on where you live you could maybe have luck there - I have a different opinion than Colton about Wichita not having attractions - there's still plenty of conventions, business etc that brings people to town - your AirBnB rate will just have to be competitive if you are only renting out a "room" and not your entire house.  

    Wichita is completely different than it was 5-7 years ago and it's for the better.  

    1Reply
  • Derek Ackerman
    Rental Property Investor · Wichita, KS · Member since 2019 · 5 posts · 5 votes
    6y

    I've found the same thing about craigslist...it used to be my go to place...not anymore.

    Originally posted by @Shane H.:

    Don't use craigslist - it became irrelevant a couple years ago - it's full of spammers and scammers -   

    0Reply
  • Brad Simmons
    Andover, KS · Member since 2016 · 44 posts · 17 votes
    6y

    I know an investor in the Wichita area that did exactly this. She rented out rooms in her home to traveling nurses. Usually 3 to 6 months at a time. She initially found the nurses on Airbnb and then word got out through the nursing community that this was a good option for them.

    0Reply
  • Jonathan R.
    Investor · Wichita, KS · Member since 2017 · 584 posts · 813 votes
    6y

    @Darsh Kumar You could buy a big house with many bedrooms (all one level) and turn it into residential assisted living. The baby boomers are aging. The market is going to be hot for some time. Google Gene Guarino, he teaches about it.

    2Reply
  • Darsh Kumar
    OP
    Member since 2019 · 12 posts · 1 vote
    6y

    @Jonathan R. Appreciate your advice! Definitely something i'll look into especially with people in my family who could benefit from this, too!

    0Reply
  • Darsh Kumar
    OP
    Member since 2019 · 12 posts · 1 vote
    6y

    @Brad Simmons thank you so much!

    0Reply
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