All Forum Posts by: Logan Fast

The market also makes a huge difference. Property taxes in Phoenix are a fraction of property taxes in Omaha. Property insurance in a flood plain tends to be much more expensive than other places. These factors among others skew the "1% rule". 

I don't think it's easy to find either a multi-family to house hack or a good property to BRRRR. It will take work to find a good deal either way, but they are out there. You could also consider finding a single family with a walkout basement, adding a kitchen to the basement, and either using the basement as a conventional or short term rental.

Hey Robert, typically you would assign your contract to a cash buyer so you wouldn't have to worry about any bank regulations. You will likely have to double close if they are using a conventional bank loan.

Hey Matt, I'm an investor in Omaha. Let me know if there's anything I can do to help you out.

@Jeff Brower what if one of the units is newly converted from a basement to an apartment? 

@Stephanie P. thanks for the reply. That's solid information.

@Matthew Roder thank you, I do think the first lender I was going through was inexperienced with this. I'm guessing she has only dealt with single-family owner-occupied loans so it was all unfamiliar territory for her. Using 75% of market rents we were finally able to get pre-approved for the amount we were looking for. It would've been nice to get in with a second mortgage so there was nothing out of pocket...but I'll be happy to get it either way.

You will definitely need to make sure you can evaluate the deal correctly. If there's equity in the deal and you have to "foreclose" and take the property, then it's actually a bigger win for you. 

@Edwin Colon let me know if there is anything I can help you out with

@Aaron Poling just an update if you were curious. It appears having the owner carry back a portion of the note is still considered debt (obviously), so this doesn't help out the debt/income issue we were running into. I spoke with another lender and they informed me that you can actually use potential market rent from the other two units to boost the applicant's income. The first lender told us this wasn't possible without 12-month leases in place. Definitely not solved yet, but things are looking good. Should know for sure in the next couple days!

@Baron Hollowell why won’t they give you an FHA 3.5% DP? If your only option is at 75% LTV then maybe the owner will continue to carry a 10-25% note if you offer them a solid return. Otherwise you can try local community banks as they are generally more flexible.