Buying a property with 2 SFH on 1 deed with conventional finance?

Question

I'm looking at a local property here in PA that has 2 SFH's on 1 deed, unfortunately its over my cash purchase budget but it is one of the better deals I have seen in the last few months of looking around and could cashflow in the $600-700 range a month with both homes rented at a conservative amount of $1200 each.  I talked to one broker and 1 bank so far and they both feel there is going to be a problem finding comps to give me the financing for it.  Does anyone have experience with this that did not use cash for a purchase like this but still used some sort of conventional financing?

Mark DeLorenzo · Answer

@Chris Mason @Eric Veronica I appreciate you guys taking the time to respond, I did get the "you can get an appraisal but it may not be worth it if we cant find comps" from the one lender, but I get your point that it might be worth the $500 or so and hoping we can find some comps to do the deal.

@Jason DiClemente thanks for that tip, I guess I didn't even think of that and would probably have just assumed a refi would be just as hard to come by because of the same reason lenders are balking a bit now but your saying the game changes a bit when you show 2+ years of income even if its a strange situation like this 2 homes on 1 deed deal?

I also had that one broker mention a renovation loan, something I am not familiar with at all, but maybe its close to the same as a construction loan for a new house which I did do when we built our primary residence. He knows its an investment property so I hope he would only suggest it if it was a viable option for a non-owner occupied.

Eric Veronica · Answer

@Mark DeLorenzo I agree with @Chris Mason that ultimately it depends on the appraisal and that can’t be known until you actually pay for the appraisal.

You may want to task the agent with doing some leg worm. He may be able to use the local MLS to see if he can locate any similar property sales in the last 12 months.

Chris Mason · Answer

All you can do is tie it up in contract with an appraisal contingency, order the appraisal, and hope for the best. If it's a good deal, it's worth the $500 risk. If it's not, then it's not and the $500 isn't relevant. Either way, next step is to tie it up in contract and order an appraisal. Good luck.