All Forum Posts by: Benjamin Aaker

Very hot in Sioux Falls. Only 150 houses for sale with 200k population.

Ha, your local community bank. I've had a lot more luck being able to sit down with a community banker and discuss my situation. You aren't always the best with the lowest rate - you also want nice terms and customer service.

Yes, sir, I am a medical professional. I have not found any specifically who lend to healthcare workers. There is a wide range of professions in that group, though. As a physician, I have managed to use the income and stability of my job to shop around to multiple banks to get the best offers on loans. 

Hi Ted, and welcome. Congrats on the retirement! Lots to choose from. I recommend starting with a fix and hold strategy. I'll assume you have some retirement money coming in and have some money saved to get a down payment. Holding could satisfy your desire to have a place for family to stay (depending on location). Consider whether you will manage yourself or hire a manager. I'm not crazy about flipping or self-managing as it can become a job and a job is the last thing you want right now. Best of luck in your future!

How do you think the inspection will go? If the place is immaculate, then you could consider going with 2 or 3. Thing is, inspectors will always find something, giving the buyer a way to back out, or decreasing your sale price. You got an asking price offer, cash, no inspection? That's my pick. Think of your holding cost for the next 60 days waiting to close as well as closing costs, uncertainty around the appraisal. #1 for me.

Hi Phillip,

If you are looking for an FHA loan, you'll need to go on the residential side and live in one unit. This will limit you to 4 units or less. If you go that route, you should be able to get a lower down payment requirement.

If you won't live there, or if it is > 4 units, you'll need a commercial loan. The government doesn't back these, so banks want more skin in the game, and your down payment is significantly higher.

Consider however, that if you have vacancies, or rents get lower for some reason, more equity in the property gives you more options to weather that difficult time. Due to more money down, monthly payment will be lower even though the interest rate with commercial loans is higher. Having that equity in the building isn't a bad thing.

I would add to Nicholas L's comment that if you intend to house hack, the benefits you receive from that practice come from the fact that you have a place to live, while tenants pay your 'rent'. If you are not living in that place very much of the year, you now have a vacant unit that is wasting money and it's not really a house hack anymore.

Matt, have you considered purchasing a 4-plex to house hack? The loan terms and valuation are similar to duplexes but you get the economy of scale of having 4 units. You are also living in only 25% of the building and that's less income loss. 

The homeowner can do a refinance depending on the terms of the original loan. A refinance gives you a new loan for a certain amount and uses part of it to pay off the original. This might have a prepayment penalty, which makes a refinance less attractive. Have this homeowner contact his/her banker first and probably a few more banks for some other opinions. Bankers usually are willing to look at the loan documents and give advice.

The income looks tight, at less than 1% of the asking price. Even if you can push the rents up. You risk going under water on this one.