All Forum Posts by: Sasha Mohammed

i would recommend you reach out to @Alex Bekeza! if he can't help, then I'm sure he could point you in the right direction. 

if you're going duplex, FHA is not a bad option. 3 and 4 unit FHA has an added guideline called "self sustainability" or something along those lines. this won't apply to you, making an FHA loan a great option! Essentially, since this is a live-in-rental, i would run both options: FHA and Conventional, and compare side-by-side. there are some pros to FHA (rates are typically much lower, down payment requirements are lower), but obviously come cons as well (that pesky PMI you mentioned). I would look at both options and compare monthly payment. if FHA gives you the flexibility to do a lower down and keep the cash-flow the same or roughly the same, then the only other thing to consider is your starting-equity. remember that the PMI is not only a monthly, but also an up-front (and typically financed) fee. even if you put the same 20% down on both scenarios, you're starting out with slightly less equity on FHA. lastly, FHA will be much stricter on property condition, so if you're looking for a value-add, may be best to go conventional to avoid appraisal issues. Hope this helps!

yep! what @Reid Chauvin said! sounds like conventional financing to me. There are other loan options that do not go to fannie/ freddie, which would allow for lower down payments. BUT! that typically also means higher risk for the lender, which translates to higher rates and fees for you. it's all a trade-off. 

yikes! that does not seem like an easy situation. While I completely feel for this person and their daughter, you have rights as the property owner. i would start by reviewing the laws in your specific state. once you know exactly how you can proceed legally, i would suggest you start with a friendlier approach. not that it's necessary, but maybe ask the agent to help them find a replacement rental. maybe you offer a small cash-for-keys, just in good faith and understanding. not saying you HAVE to, but you might find it way easier to vacate them with some kindness and compassion, rather than playing hardball. if that doesn't work, then take the necessary steps to vacate them through legal means. 

i could be wrong, but personally I've never heard of needing to provide food monies. if you're only asking them to relocate for 3 days, you would just prorate the 3 days worth of rent as either a credit or cash back. what they chose to do with it is up to them. again, I could be wrong. but this is my understanding. 

@Jonathan Taylor has experience with this!

it would, unless the seller would be willing to subordinate. even still, most reno lenders are financing more than 100% of as-is value, and won't want ANY other lien, even if they are given priority position. i have seen this strategy work, but with private investor to finance the renovation as opposed to an institutional lender.

I would think SBA would look into this, but i'm not an expert on SBA loans to tell you for sure. My best guess is that even if SBA did, the process would be slow and cumbersome, and not in line with a typical 30 day escrow.
There are mortgage lenders that will finance AirBNB properties, though! they are few and far between, so I suggest a mortgage broker who specializes in these loan products.

@Alex Bekeza might be able to help.

I would cash-out refi. rates are still historically low, and if you can reduce your monthly expenditures by what seems like $600/mo, pocketing or saving that will get you to the next investment property faster. You keep the roof over your head, because either way you slice and dice it, you'll need to buy or rent another if you sell. and there are loan types for investment properties which do not even look at DTI/ ability to repay. They're based strictly off the rental income that the investment property generates. Hope this helps!

edit: if you prefer to go the new-primary route, you would have to qualify with your DTI, but most conventional lenders will allow what's called "departing residence", and let you use the rental income generated from your now-primary-turned-rental to help you qualify. They wont give you positive rental income (eg: if your mortgage is $2500 and the rent is $3k, you wont get +$500/mo on your DTI).... but the rental income would offset the existing payment and make your next primary purchase much easier to qualify for.

@Nicoló Tossici we do non-income qualifying loans for investment properties all day long, and our lenders typically prefer you close in an LLC. Instead of using your personal income to qualify you, they will look at the property as a business, and qualify the loan off of the rental income vs carrying costs, not your personal ability-to-repay. Feel free to reach out if, i'd love to see if we can help! We are a brokerage and specialize in this loan type, so we have quite a list of lenders who work on these :) we'll find one that meets your specific needs.