All Forum Posts by: Derek Brickley

Hi Michaela!  You can definitely use rental income from the other units to help you qualify.  When your chosen lender has an appraisal done on the property, you will get a comparative rent schedule for the other units.  You can use 75% of that value to help you qualify (boost your income) or if the other units are currently rented, they will just need a copy of the lease agreements and can use 75% of current rents.  This is just to compensate for vacancies, repairs, maintenance, cap ex, really all other expenses you will have from renting those units.  

I'm not sure your particular situation, and to see if there is another option better for you, I'd recommend talking to a lender that has experience with investing. If you live in an expensive market you can use Home Possible which is a Freddie Mac product. This does require slightly more downpayment for a multifamily property (5%) but depending on your situation there are some pricing advantages with potentially lower Private Mortgage Insurance. If you plan on acquiring more househacks in the future and you're eligible for this program, I believe this is a great option because you can have 2 Home Possible loans (acquire 2 househacks in 2 years) and then if you decide to get a 3rd househack you would then be able to use the FHA loan. If you use the FHA loan first, you would be unable to get 2 Home Possible loans. Just forward looking :)

Can you vest a property in an LLC with a house hack? Most gov and conventional programs don't allow that I thought??

 How would you accomplish that?  Hire a property manager?

 My realtor and I are all for submitting lower offers, but that is definitely something I need to keep in mind!  Part of the problem is that there are basically no properties within my pre approval amount (at the moment) or really anywhere close.  

I am definitely open to widening my criteria.  One thing is that in order for my pre approval to be valid it must be a multifamily property due to the fact that the rent coming in from the other side is being considered to approve me.  Before I got a pre approval there were a handful of really great properties and deals that I went to see and walked through but I couldn’t get approved at the time, so I know they are out there but I missed out.  

Hi all!  I graduated from college in 2022 and started working at a mortgage company and have gotten preapproved for a househack.  I’ve been looking for about a month and a half with a investor-friendly agent for on-market deals but I haven’t had any luck. My goal for 2023 is to get into my first househack in a 2-4 unit property preferably side-by-side or up-down.  At the moment nothing is being listed in my local market, and anything listed is not in my Crystal Clear Criteria for location/sub market or the numbers are no where close to making it a good deal.  I won’t push myself into a deal that doesn’t work, but I am getting very eager to make it all happen.  Does anyone have any thoughts or suggestions?  I don’t know much about finding deals off-market, but I’m wondering if that is where I need to start.  Thank you in advance!

Hi Simon! That definitely is not true. Anything 1-4 units is considered residential real estate and you can definitely get a 3.5% down FHA loan on it. In addition, you can most definitely use the rental income from the other unit(s) to help you qualify without it being commercial. I'm not sure why multiple lenders have told you that, but they definitely are the exception not the standard.

Hi Elie! I think an important question to ask is how much you can/want to use for a down payment. My guess would be you're looking to put as little down as possible. Are you looking at buying a property with 2-4 units or house hacking by the room in a single family home? The good thing about FHA is that you can put 3.5% down on a property 1-4 units. Conventional is a bit more complicated, and the options depend on your income and your specific lender. Some lenders will allow 3% down on a single family home, but generally there are income limits. On anything 2-4 units you could get a conventional loan with some lenders for as little as 5% down (but this also has income limits). You would need to talk to your specific lender to see what they could do for you. With your credit score and low DTI, if you are eligible for a conventional with 5% down that may be the better option since your mortgage insurance would be less and it automatically falls off when you get 20% equity (compared to FHA which never drops off with some exceptions). In my mind, if you qualify for this conventional program then you could house hack with this type of loan twice without refinancing and then if you decide to house hack after that you could then use an FHA loan. However if you do the FHA loan first, you would only be able to use the conventional 5% down program once. A lot of info here … but I hope it helps!

Hi Skye!

I’m in a very similar position!  I’m 22 now and looking to househack in Michigan but also live in a small town currently.  Resources I have found include: 

https://datausa.io/

neighborhoodscout.com

Crimegrade.org

Niche.com

Unitedstateszipcodes.org

Brandon Turner has recommended in the past:

Worldpopulationreview.com

cityprotect.com

Greatschools.org

Bestplaces.net

I would be interested in the next meetup!  Just joined the Facebook page, but doesn't look like there is any MI event coming up at the moment.  Keep us all updated, please!