All Forum Posts by: Chad S.

 Hey Steve! Thanks for the tip, we're trying to line everything up with our current lease (we're renting) expiring April 1, 2016. We do have the option to go month to month for 2 months beyond that in case we do need more time. We're also trying to save up as much as we can for the down payment and closing costs so we have 2 timelines to work against. Thanks again!

 Those are really good questions. I'm not sure how to answer right now but will look into it. This will be my first deal so it's helpful to know what questions to ask. The mortgage broker did mention that some of those closing expenses will be paid by the seller, I was just typing out everything that was on our print out. Thanks!

Hey @Brie Schmidt! Thanks again for all of your help before, the spreadsheets are a huge help. We know we may have to go FHA, but for the property to qualify for the 5% down community loan program, the property has to be in a "low to mid income area". We can check that on the FFIEC site. We plugged in our own address (which is right on the Ravenswood/Lincoln Square border) and saw we were in a mid income area. We love the area we're in, a half-mile walk to all the fun stuff in Lincoln Square.

 Thanks! That's good to hear, we really appreciate your input.

My wife and I are looking to invest in a multifamily building on the north side of Chicago. We'll go from renting, to being landlords in an owner-occupied 3 unit building. Our real estate agent recommended someone at Guaranteed Rate for the loan approval. We met with him today and found out that we can get a 5% down conventional loan which is nice, because we thought we would have to go FHA. It was a lot to take in and we're not sure how great the overall loan terms sound. We can probably do about $40,000 for a down payment, and could qualify for around $650k this was just an example they gave.

Loan Program Quote

• 5% Down
• $500,000 purchase price (example)
• $25,000 down
• Interest Rate 4%
• APR: 4.360%
• Product: Agency Conforming FHLMC 30yr fixed Home Possible AMI > 80%

Example Monthly Breakdown

• Principal & Interest: $2,267
• Insurance: $150
• Taxes: $677
• Mortgage Insurance: $170
• Total: $3265

Other

• Lender Fees: $1,190
• Appraisal Fees $450
• Prepaid Interest: $780
• 1yr insurance premium: $1,800
• Insurance Escrow Reserves: $300
• Tax escrow reserves: $4,602
• Title Fees: $1,000
• Owner's Title Insurance: $2,000
• Lender's Title Insurance: $1,500
• Transfer Taxes: $3,750
• Recording Fees: $168
• Total: $17,000 (according to the broker we'll get about $10,000 of that back in the first year)

Do we need a second opinion or do these numbers sound fair? Curious if anyone has any input.

Hi everyone,

We are looking for guidance about our first home/investment property. Our lease for our apartment is up in April, so we would like to have enough saved for a down payment by then. As mentioned in a previous post, we are currently focusing on purchasing a multi-unit and live in one unit while renting out the other unit(s).

If we did the traditional down payment route, we are setting our sights on a $40k down payment for a $200k home. For the Chicagoland neighborhoods that we are looking at, we think we will have a hard time finding a multi-unit place in that price range.

We wanted to learn more about the FHA loan where the 3.5% down payment can help us increase our price range and open us up to more properties, but paying interest on the 96.5% principle is unsettling for us.

We always hear about how the FHA loan is a great option, and we do believe it is if it will help us find a property that will help work towards meeting our ultimate goal of financial freedom in the long run. However, we don't hear as much about the downsides of getting the FHA loan and we are torn about which option is better for us.

Our next step is to meet with an agent (who also invests in real estate), but figured we would post this question to see what you all think first. We'd really appreciate any insights. Thanks!

@Crystal Smith

Hi Crystal! This is Rachelle, Chad's wife. Thank you for taking the time to read through our post and respond with your insights. As for the affiliate income, Chad listens to podcasts on the topic and built out the website about a year ago. The website targets people searching for reviews and best products of a certain niche. It has Amazon affiliate links, meaning that if people buy something after clicking on the link, we get a small commission. We are very happy with the site, but we would like to invest the profits into a more tangible investment. 

With our lease ending soon, we are first looking at purchasing a multi-unit property, so your feedback about the owner occupancy down payment is very helpful. We will look into that! Scaling and vacation rentals are definitely a part of our long-term plans, so thank you for your encouraging story about your business partner's success and for your advice on the vacation rentals.

Rachelle

@Mark Nolan and @Nick Patterson

Thank you both for your replies. Nick, we have added the book to our must-read list. Thank you for the recommendation and the well wishes. We appreciate it!

Hi Everyone, I'm wondering if anyone can critique my plan or even make suggestions. If this isn't the right forum, or too much info, I will delete this post. 

Recently married, late 20s. My wife and I have never owned real estate and are currently renting in Lincoln Square, Chicago. Our lease is up in April '16 and we would like to transition into owning a single family home or ideally, a duplex to live in and rent out. Currently our rent is $1500/mo so we're looking forward to paying less via a mortgage. Wife and I combined salary is around $130,000. 

What got me interested in real estate was trying to think of what to do with the supplemental money I was making from a niche affiliate site that I created a year ago, that is making around $2500/mo in totally passive income. I'm at the mercy of Amazon and Google, so I was hoping to invest that money into something more stable/tangible. 

My wife and I don't spend a ton of money and try to live below our means. The idea of saving up around $20-35k for a 20% deposit on our first home sounds good, ideally a multifamily. And every time we can save up another $20-35k we would buy another home as a yearly rental/vacation rental and so on and so forth.

Personally I'd like to move somewhere warmer like Austin, TX or Tampa, FL, but my wife's job typically requires her to be in the Chicago area, but there could be a possibility of moving anywhere we'd like.

Our goals are to quit our jobs and do real estate full-time, and we are also interested in owning vacation rentals to airbnb in places we'd be able to visit and stay at for free.

Is this a good place, or is there sub-forum, where I can discuss my plans and get some critiques on the strategy I've picked for my situation? I am still renting now and would be interested in feedback of my long term goals.