All Forum Posts by: Scott Radetich

I went through this a few months ago on one of my rentals.  I shopped around a lot looking for the best deal.  I ended up using an online company, Consumer Direct.  My closing costs were in the 2-3k range and the rate was 4.125.  Rates are lower now...  They can close in less than 45 days.  Oh, but Consumer Direct will only lend to you if you have 4 or less properties (or its a primary residence).

A positive for it being fully occupied is it will be easier for a buyer to finance. With a lease, most banks will include the rent as part of the borrowers income, which greatly affects their DTI.

And Its only 90 days the buyers has to wait to move in.  If they want it, they'll wait, cause as you stated, there's a lot of demand for MF house hack.

@Marcia Maynard  WeGoLook.com  I haven't used them but I've been hearing about them lately.  They the boots on the ground services you are looking for. 

nextdoor.com is another site you might be interested in. But really, if you want to know what's going on in the neighborhood, you'll need to know the neighbors.

Tell your agent you want a 2-4 unit, run your numbers and buy the deal that makes sense.  don't forget about those Triplexes;)   Also, I've seen several deals where someone is selling 2 duplex's on neighboring lots, so its basically a 4plex deal. You wouldn't want to miss out on that if you are only looking for a 4plex.

I also don't know why I said take out a line of credit.  With the rates as low as they are now.  Just do a cashout refi.  Especially since its owner occupied.  125k at 4% interest for 30 years raises your PI by $600.  The rent you will receive will more than cover your increase.

Take out a line of credit, Demo the garage and put in a real nice ADU for about 125k, that would fetch close to 2,000 a month.

There's lots of information out there about ADU's. Last summer I went on an ADU tour where you can meet the homeowners and contractors who have built them. I'd think they would have it again? Here's a spot to start. At the very least, its worth looking into.

https://accessorydwellings.org/

I'm not exactly sure what you mean by, loan was longer term than 12 month payback period?

The main advantage for using an online company such as Consumer Direct is cost.  They are a check the box type of company and if you can check all the boxes, you get a very well priced loan with great rate.  If you don't meet all their checks, they aren't going to give you a loan.  Which is why after I failed to check a box (can't have more than 4 properties with them), I had to go out and find another company like Security National.  Now if I failed to check a box at Security National, I would of been running out of conventional loan idea's and had to go the commercial loan route.  Before I found SN, I looked into commercial loans, they are spendy...

Now, one advantage for going with a local bank is if you are planning on buying a lot of properties and want to build a relationship with one bank. That way they get to know you and maybe can look past a missing box. But in today's environment good luck. I've worked with Key Bank a lot and they couldn't get past my DTI issue (and I wasn't off by much). They told me once I get a lease in hand the income could qualify. But with the deal i'm working on, that isn't going to happen.

And this is all for just conventional loans (10 loans or 20 with a spouse).  Over that, you are going to need to build a relationship with a local bank. 

A more conservative option would be to buy a primary residence that needs work.  You'll learn plenty fixing it up, and you can take your time to get it right.  Sell it in two years, pocket some tax free money and go out and flip the next one.  Though I see you have a little one, home renovations with child can be tricky but its not impossible.

For your first 4 properties you get the best terms. I recently refi'd a few of my properties and used an online company called Consumer Direct. They had the best rates and very reasonable closing costs. I'm in the middle of trying to buy a few properties now that will put me over 4 and push my DTI above certain lending guidelines (a few units aren't rented, so no history = no income). I had to look around, I found Security National, their rates are a little higher than Consumer Direct, but they will take into account the market rent (75% of it) and add that to my income on the non occupied units. Another company I've used locally Key Bank, they are pretty flexible and I think they go up to 6 properties (but it could be 4). They let you put down 10% for primary btw.

Good luck!