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San Diego Real Estate Forum

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Bryce Baker
  • Property Manager
  • San Diego, CA
14
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Funding First Property - Owner Occupied

Bryce Baker
  • Property Manager
  • San Diego, CA
Posted Aug 17 2018, 15:31

I've been analyzing condos in 92102 and believe I can make a 2B/2BA work with an FHA owner occupied loan just so I can get my feet wet with my first deal and stop wasting my money renting. I believe I can leverage direct family to provide the capital for anything above what I cannot afford in terms of closing costs and unanticipated costs that may arise during my first purchase. My question is how do I involve my family in the deal for an owner occupied purchase? Can it be structured so that they receive benefits from appreciation, etc? I simply want to get things rolling and a condo that makes my housing expense tolerable by renting out the other room seems to be my best option at this point. All input appreciated, thank you!

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Perry Farella
  • Lender
  • Chicago, IL
149
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189
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Perry Farella
  • Lender
  • Chicago, IL
Replied Aug 17 2018, 15:40

HI. Be sure to check the condo development has been pre-approved for FHA loans, many are not . Or were in the past but have Expired. You can check at HUD website for condo approvals by zipcode. Alternatively you can buy with conventional financing with 5% down. If you need funds for down payment that can be a gift from family. You would still live there for 12 months and then turn it into a rental. If you need rehab funds that can be added ot the conventional loan called HomeStyle.

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Casey Murray
Pro Member
  • Investor
  • San Diego, CA
80
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290
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Casey Murray
Pro Member
  • Investor
  • San Diego, CA
Replied Aug 18 2018, 11:17

@Bryce Baker Get everything written on paper as if it's a legal binding partnership with your family. List out who gets their allocable share of rental income, expense, depreciation, credits and appreciation. Will you sell after 3 years or is this going to be held a long time? Are you going to refinance down the road to pay them off? Consider the important scenario and get in agreement. Good luck!

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User Stats

20
Posts
14
Votes
Bryce Baker
  • Property Manager
  • San Diego, CA
14
Votes |
20
Posts
Bryce Baker
  • Property Manager
  • San Diego, CA
Replied Aug 20 2018, 19:52

@Perry Farella and @Casey Murray really appreciate the input, both very helpful! I'll DM you guys as I get into specifics of a deal :)