All Forum Posts by: Michael Facchini

@Aaron Zimmerman, appreciate the shout-out!  @Brayden Schiff, here to help in any way!  Any questions, fire away!  Hopefully the thoughts above are helpful and get you on a more fruitful track for this first house-hack.  

@Brayden Schiff, kudos to you for getting on the real estate investing and house-hacking track fresh out of college! That's the way to do it my friend! First step is to figure out some of the finances and options, and then narrow down on areas where the opportunity exists. As much as I love Lincoln Park, Wicker, and Wrigley, those are tough spots to pull off a first house-hack, for the reasons mentioned above - namely the restrictive FHA loan limits. Prices in these neighborhoods are too expensive, and unless you have a healthy chunk to put down, it's hard to make something happen there. But there are plenty of surrounding neighborhoods where big things are happening. Happy to point you in the right direction there! I've got some stuff in Lakeview and LP, but I'm turning more towards the "developing areas" on the fringe of these expensive neighborhoods to find the real deals :-)

All still a bit fresh, but I anticipate that new construction (ground-up) lending will tread lightly on this until the rest of the details are ironed out and clearer guidance is provided by the city.  Renovation financing of existing structures to meet current guidelines will likely be the better bet while this all gets flushed out.

@Brie Schmidt Agreed, it has been too long since we've had an FHA bump to loan limits. Chicagoland is anxiously awaiting!

@Zach Click, as mentioned above, Freddie Mac HomePossible (Conventional Program) is the only option for a 5% down conventional solution.  The issue is there is an income cap - meaning, if you make over that amount (including rental income used on the multi-unit for qualifying), you are not eligible.  For most of Chicagoland, that limit is $71,280.  Thus, kind of a catch-22.  You need a certain amount of income, including rents, to qualify for a building of any notable value/price, but then your income exceeds that HomePossible cap and you're not eligible for the program.  Make sense?

Other low down payment programs for multi-units, called "portfolio programs", have been suspended during this Covid economy, and there is no line of sight on these types of programs coming back anytime soon. Thus, FHA would be the best low-down program, and the limiting factor there, as you probably already know, are the loan limits (mentioned above, 2unit @ $471k, 3unit @$570k, 4unit @ $708k). We are all hoping the FHA loan limits increase next year, as it has been years since Chicagoland has seen an increase,

Hi @Hubert Deng, happy to help here.  So, IHDA is a decent down payment assistance program, but there are some catches to it that need to be considered - a few more hoops to jump through, and tad higher rates, for example.  Regarding the 2 months in your current gig, is it a salaried position or hourly?  Were you working prior to this, in the same line of work or different and for how long?  In school?  Any gap in time between your previous job/school and this current job, and how much?

@Blair Matejak, there are options to put down less than 20% down on this next purchase, including FHA. FHA multi-unit guidelines are very nuanced, but your scenario very would should work based on what you've shared thus far.

@Andrew Lake, that's a great question and really hard to answer via online research and reading some of the above.  Issue is 2 things: 1) It's very much market and sub-market specific.  2) It's a moving target now more than ever.  Labor and material costs have changed in the matter of a couple months due to Covid.  Labor shortages, material supply-chain issues.  Now, I'm not saying this will be the case forever moving forward - it will normalize (well, labor will always be a concern in my opinion, as less people get into the trades) - but nonetheless, the best way to really hone in on costs and what you'll need to navigate in a certain city, on a certain project, at a given time, is by surrounding yourself with experts.  An agent that specializes in multi-units and rehabs, same for the lender, and then of course a good, experienced, reliable GC.  That dynamic trio will guide you through all your questions above and more.  If they do many rehabs per month (not just a handful per year) for their clients and even themselves, in the areas you're interested, on property types you're interested in, then you'll learn a TON through their experience and guidance.

Correct, FHA is very strict on too many primary residences within a marketplace (defined as 100 miles from your current, owned primary residence). There are lots of guidelines and potential loopholes around this though, and definitely need to understand ways to possibly navigate.

@Elier Roman - in the event they are looking to acquire a church property, it would fall under commercial financing, and given the zoning/use, likely will fall under a specific sector of the commercial market.  A good broker should have these wholesale relationships and could help.