All Forum Posts by: Paul Manno

@Phil Eck : Known Tom from TMC builders for a long time: http://tmcbuilders.com/

He's great.

Paul

Hi @Michael D.

You can put 3.5% down on an FHA loan. You'll benefit from the low down payment, but costs will be higher in the addition of the FHA funding fee and Private Mortgage Insurance (PMI). Make sure you take all of that in to consideration when running the numbers on the building you're looking for since it will be a difference of hundreds of dollars a month. Also, FHA has some strict requirements about property inspections and such (when the FHA inspector comes in, s/he may require that repairs be made before they will fund the loan). This can scare away sellers since, depending on how you word the contract, they may be on the hook for any repairs the FHA inspector finds. You'll have to speak with your attorney and possibly indicate in the rider that you will pay for any repairs, up to some dollar amount, to make the seller more comfortable with the FHA loan. Finally... FHA loans are best for 2 flats. If you start getting in to 3+ units, FHA loans will require that the building be self-sustaining, and the determination of the income will not necessarily be based on current rental income, but instead what an FHA appraiser determines the rents should be for the units. You have to pay around $1k for the appraisal, and if it doesn't work out, you're out that cash.

Hope that helps! Best of luck in your hunt!

Paul

Thanks all for the warm welcome and great information! I'll be sure to read up on the CLTO and speak with my attorney about lease structure.

All the best,

Paul

Hi all,

Happy new year! My name is Paul Manno and I am new to realestate investing. Planning on purchasing my first owner-occupied 2-3 flat in Chicago, IL this year with plans to continue purchasing buildings year upon year, to grow a small Chicago realestate empire.

Thanks,
Paul