All Forum Posts by: Melissa Harris

I am in the middle of selling my single family home and will be able to pay off the remaining of my debt and be debt free!!! I will have about $60,000 left over once I pay off my debt to put towards my next primary property. My plan is to buy a 3-4 unit property with an FHA loan and only put down 3.5% and live in one of the units and rent out the others for the next 2 years and then refi into a conventional loan and pull cash out to buy my next multifamily etc.

The question I have is who has done then recently in Colorado? I am finding it really hard to find a property that fits the Loan Limits with a FHA loan. I am looking to buy close to the Fort Collins area. I am a licensed Realtor, so I am planning on NOT taking a commission and have them lower the purchase price but what other strategies have you guys used in order to buy in this hot Colorado market with a FHA loan and only putting down 3.5%? Any advice would be great! Thank you for your time and looking forward to some responses :)

@Jeff Brower great information! I am happy to hear that you have actually gone through a similar situation and you are verifying that they do use 75% of projected rents for my DTI. I will have to shop around to find more lenders that do more of these type of deals and go from there! Thanks again.

@Andrew Kerr thank you for your response! Yeah that is what I have heard alot too but 1 of my lenders that I refer out to alot of my clients, was telling me that I would not be able to use ANY of the rental income until I show it on my tax returns for 2 years. But then again she has never closed on a multifamily before, she has only done single families and single condos. I went and talked with another lender that has done these type of loans and he is telling me what you told me. So this helps me know that I need to shop around a little bit more on lenders and see if I can get more of the same answers. 

I am getting pulled in all kinds of directions with really knowing if I can purchase a 4 unit as my primary residence with a FHA loan and be able to use the rental income as part of my DTI? Has anyone done this recently? I would love your feedback! Thank you :)

I am wondering if anyone has any properties in the Virgin Island and if you do, do you do a Airbnb with it when you are not there? And how is the cash flow and ROI if I purchased a property there as a second home and wanted to rent it out when I am not there?

Yeah I feel like the lender is just not to familiar with all the rules on this subject. 

Yeah that's what I thought and I thought that's what I have heard several times over many different podcast.

I had spoken to a lender and I thought that I would be able to buy a 3 or 4 unit property for 3.5% down using a FHA loan, if I used it as my primary residence but she told me this break down:

With 1 unit – you could put 3% or 5% down

With a 2 unit – You would put 15% down

With a 3-4 unit – You would put 25% down

Is this true? Or should I talk to more lenders?

@Cynthia Hairston @Andrew Johnson @Nghi Le Thank you guys for your response. I spoke to a few hard money lenders and with this being a commercial property and not needing much repairs, they told me that it wouldn't make sense for me to use them. So I am going to try and talk to the seller and see if they would be open in doing a "subject to" or agree to do a "master lease agreement". I am meeting with him on Saturday. Wish me luck! :) 

I may have a great off market deal with a 10 plex here in Colorado that the owner is looking to sell. He is asking $815,000 for it and by running the numbers, they look really good at a price at $652,000! The cash flow after all expenses (5% Vacancy, 5% CapEx, 5% Repairs, 10% Property Management, $400 water/sewer, $500 insurance) which will put the cash flow at $4,200 and ROI would be 7.69%, But I do not have the money to fund this deal OR get a mortgage for this deal as I do not have the 25% down. So my question is what type of other financing can I use? Would a private or hard money lender lend money on a rental if the cash on cash ROI and monthly cash flow were good but didn't need repairs? What type of numbers do they look for? Or do you think that a private money lender would lend me the 25% down payment for a portfolio loan?

Any suggestions would be greatly appreciated!