All Forum Posts by: Jake Tovey

@Jennifer Turner Not sure of conventional loans for 5% down or less, but I can confirm that FHA/ FHA 203K loans are not simply for first time home buyers You're just not allowed to have more than one owner occupant loan at the same time. So if you buy one of them with a conventional loan, but the other with either FHA or FHA 203K and move into it for a year you will be fine.

Best approach in my opinion is to just find an investor-friendly mortgage broker in your area and ask to see your options. Just network around. But as long as you don't have any owner occupant loans currently, you shouldn't have an issue being eligible for the FHA as long as you plan to move in there and live there for a year.

Heck, if you want both properties badly enough, maybe you live in one property and your husband takes the other and you live apart for a year. Just both apply for your own FHA loans if you can both qualify haha.

No problem. Debt-Coverage ratio is just the Net Income / Total Debt Service. A 1.2 ratio means your net income is 20% higher than what you owe every month. Banks like to see at least that much coverage to refinance. That’s tough when house hacking because you can’t count potential income from the unit that you’re living in (From what I’ve been told). The goal of house hacking is to break even essentially, which means a debt-coverage ratio of 1 or so. Doesn’t mean it can’t be done of course but you need to keep that in mind. 

And you can only have one FHA loan at a time. So if you want to ‘Repeat' you have to refi into conventional first to be eligible for another FHA loan or find a different way to finance your next deal.

@Apinya Patterson Look into FHA 203K loan. Allows you to wrap rehab costs into one loan and still only put 3.5% down. Too use BRRRR with this, use the 70% rule (Purchase Price + rehabs < 70% of the ARV).

This is what I’m hoping to do right now, house hack a small multi-family with 203K and refi into conventional after 6-9 months of possible. You have to look at your Debt-Coverage ratio though, most bank want a 1.2-1.25 Debt-coverage ratio to finance which is tough for a house hack. It’s tough to do and you may have to move out after the year to get the debt-coverage ratio up, but it should work.

I recommend finding a good investor friendly agent with experience to help you out. Network. I’ve learned a ton from my agent, books and reading the forums here at BP.