All Forum Posts by: Michaelina Stathakos

For a standard Fannie Mae type loan you will have to put minimum 20% down and for 4 units or more it will be 25% down, this is regulated by the government. Some say they have found different/lower but it is very hard and in the past year or so the regulations have been more strict. 

Other ideas...You can get a private loan for just the down payment especially if you buy a 4 plex, if you buy right it can give you more income to pay off everything....If you have enough equity in your current place refinance it now to get your down payment out...Try to sell your current place with the stipulation that you will rent it back for 2 months while you finalize in the other...Sell your place and rent....You can always sell your place and crash at a relatives. Most of the options are iffy and some are sucky but there are ways to swing it if you really want to.

Good luck!

I bought a house from a family member for $40K through First Community Credit union and they did it. They told me they don't "normally" write loans that low but they did...Shell federal credit union advertises that they will "work on any loan" you could try them...look for small banks. And if you become a member it helps.

With a 4plex you still have to have 25% down.

Ok O'wise ones! Advice please?

We own a 3 story 4plex built in 1885, the top 2 floors are 1000ish sqft and are tenant occpied. The bottom floor is a very small 1/1 and an efficiency. We were hoping to rent out the 1/1 and keep the efficiency for ourselves. We are having a hard time finding someone (decent) to rent the 1/1, the ceiling height is low and it really is very small. Last month we had a water damage in the efficiency and now we have to spend some money on repairs and to raise the floor. Since we have to spend the money to fix the efficiency we thought about combining the 2 units to make an even bigger one, in hopes of it beeing more marketable and of course so we could charge more.

Thoughts? Worth it? Not worth it? Will it hurt resell if we ever have to?

Thank you in advance for the advice!

It is a "hard and fast" rule set by the government. This is required with traditional loans. Just closed on mine in October and had anticipated a 20% DP as well, boy what a shock!

If you are buying the rental property to hold it the don't worry about the "numbers". Just make sure you can afford it, can afford to keep it, can maintain it and can sell it if you need to get out from under it. If people are buying them the day they go on the market thats great, it means you are looking at the right properties, the ones all the others want. If you plan to keep the property it doesn't matter what you pay for it, property value will always increase. We looked and looked and looked and looked and like you if it was something we wanted to buy they were either under contract the day they went on the market or our offer was over bid. Finally we found one we loved the day it went on the market and we offered full price and got the contract. But we knew we could afford it, afford to keep it, afford to maintain it and already have 2 offers to sell it! It is 100% occupied and making the mortgage plus! 

You would need the homeowners policy for the loan (to cover the property and your belongings) the renter's insurance policies are for the tenants own furniture and belongings. The the umbrella policy is only for liability (if you are sued).

If you are going with a traditional loan company make sure you have the DP % correct. We did numbers for our first quad with a 20% DP and then 2 weeks before closing were told it was 25% DP which can be a total game changer.

I recived a commercial quote on my 4plex of about that much. Then I went with the same company the previous owner used and did cash value and the cost was much better, about half. But my property is in Texas as well and the flood and wind were just as much. Insurance prices suck!

Make sure the transfer of all the deposits and prorated rents are negotiated/agreed upon and included in the sales contract. I just closed on a fourplex and the lender wouldn't allow any of that on the HUD and it all had to be handled outsude of closing by ourselves and some of the prorated rents were incorrect and we were shorted the full amount.