All Forum Posts by: Zack Karp

@Tyler D. it comes down to what you want. Do you want to live in a killer home? Or make money?

If you buy a 2-4 unit, you are required to live in one of the units for at least 1 year, and then you can move out and convert it to a full rental. The other unit(s) you can rent out year-round. Not sure where you got the 6 months from, that's not a thing.

I help a ton of Veterans use their VA benefit to house hack 2-4 units in Chicago. Just closed one for $1.4M last week for a Veteran. If you need any help or have any questions, just let me know.

TYFYS and best of luck!

HOWEVER (assuming this is a condo), if you are putting at least 10% down as a primary residence, then it qualifies as a LIMITED condo review, not a full review.  And in a limited review condo questionnaire, there is not a requirement to ask for the investor concentration.

The buyer that went pending was probably putting less than 10% down. And now the listing agent and seller don't know any better, and think they only can get a cash buyer to qualify.

@Scarlett Schroeder yes you can absolutely get a heloc from a different bank on your primary, as long as there is nothing in your current Mortgage/Note prohibiting a 2nd lien behind their 1st lien. Stay away from the big banks for the heloc, they don't offer as high of an LTV as a smaller bank or credit union will.

Best of luck!

@Gabriel Barrero if you refinance to a Conventional investment property loan, which pays off the current loan (and means you're no longer bound to that Mortgage of occupying for 1 year), then you can do that at any time and move out and rent it out.  If you don't, and you move out before 1 year and rent it out (unless you got orders to transfer), then that's mortgage fraud.

TYFYS and best of luck!

@Christian Chartier there's also another wrinkle in your plan. When you refinance out of VA to either FHA or Conventional, your VA entitlement does not automatically get fully restored. The only way it gets fully restored is by selling the property. If you refi, you are only eligible for a one-time restoration. Which means at the price points you are mentioning and buying with VA, you likely will only be able to do this twice.

To really maximize your ability to house hack 2-4 unit properties with low down payments, there is a very specific strategy and order of which loan types to use. You will want to use FHA first before VA. This is due to the FHA lending guidelines of using rental income from your vacating property if you are not relocating 100 miles away. Then use the Conventional Home Possible loan, which allows a 5% down payment, if your income is below the cap. THEN, use VA third. And then depending if you have remaining secondary/bonus entitlement, use VA again 4th. This is all without having to refinance anything yet. Then when you are ready for the 5th property, you will have a lot more options. Either refi one of the first 4 to free up your FHA or VA eligibility, buy a SFD with 5% down, or if you've done well enough, start buying investment properties instead of house hacking.

It's best to get with a loan officer who truly understands house hacking, and map all this out for you, so that you don't get stuck because you don't know all the nuances of the lending guidelines.

TYFYS and best of luck!

@Tiya Khambadkone option 4...

Rent your current home here in IL, buy another investment property here in IL with cash, AND buy a primary home in ATL with just 5% down.

Assuming you have the funds for all that. Seems like you should based on your post, or very close.

That's your best outcome. 3 properties instead of 1 or 2. No need to tippy toe into investing, jump in, and in hindsight later on you will be glad you did.

Best of luck!

@Caeden Jacobs Conventional over DSCR all day if you qualify. The max LTV on a Conv investment property rate/term refi is 75%. Assuming you owe around $121K now, the property would need to appraise for around $165K+ (so that you can roll in closing costs with the refi).

Yes, by refinancing out of FHA, you can use a FHA loan to buy the next property. However, in order to use rental income from the vacating property, you must be relocating at least 100 miles away. There's also a Conventional product called Home Possible that allows you to buy a 2-4 unit with 5% down, but there is an income cap.

It's best to get with a loan officer who understands investing/house hacking to map out your next move(s) and make sure you qualify. It's always best to understand your exit strategy and look a couple moves ahead before you enter into any deal, so that you don't get stuck.

Best of luck!

@Doobie Sims Unfortunately most loan officers don't even know about delayed financing, and frankly most of the ones who do, really don't understand the power of it and what can actually be done. There is a very advanced strategy with delayed financing to get all of your funds back out. I sent you a PM if you want to discuss further.

Hey @Jonathan Klemm that was a confusing way to explain it.  Let me simplify...

Normally FHA allows 3.5% down. When buying from a family member, you need 15% down. The only exceptions to 15% down is when the property was either that family member's primary residence, or if you were renting there for at least 6 months first.

And to answer your question, yes the deal can be structured at 85% LTV if buying your Dad's investment property. If you need any help with structuring that, feel free to reach out anytime and we can map it out.

@Jonathan Riordan that's wayyyy too high.  It should be more like $1200 ish.  You're getting hosed.  Run.

And if they are trying to dangle a low rate in exchange for that cost, that's a terrible strategy heading into what "experts" are all saying that rates will come down in the future.  If that happens, you'll have an opportunity to refinance to a lower rate.  And any points/cost you are paying now you will just be pissing away.

Best of luck!