Home Buying in Connecticut>Question Details

R H, Home Buyer in Connecticut

My fiancee and I are looking to buy a multifamily home as an owner-occupied investment......

Asked by R H, Connecticut Sat Oct 25, 2008

Hi,
My fiancee and I are looking to buy a multifamily home as an owner-occupied investment. We make around 80k a year, have around 80k to put down on the house (although we'd like to put as little as possible down) and both have excellent 780 credit scores. We are looking in the valley (although would like to avoid ansonia, and derby) and would consider anything reasonable in Fairfield county. I would prefer at least a 3 family with a decent lot and off street parking. We would consider foreclosure/short sales. Side by side multi's are preferred. We would also qualify for a teachers CHFA loan. I've searched craigslist, and several MLS listing services and can't find anything decent. Does anyone have any suggestions? Also am I correct in saying we can list 85% of expected tenant income on our mortgage application? Would buying a 5 unit under an LLC w/ a corp loan be a better option? With stated figures/credit score/downpayment/expected rental income what is our price limit?

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It sounds like you have done your homework and Dan (below) has provided you with some excellent guidance on where to get started with the financing side, as well as things to look out for in the buying processs. If you would like to start monitoring the Fairfield County market to see what properties are available in your target range, I would be happy to provide you with a free account on my ListingBook MLS search service. Just send me an email at Marcie@BersonTeam.com or visit my website at the link below to register for the service. My husband and I have personally owned a number of multi-family properties as investments and I've also helped clients to purchase multi-family properties as owner-occupied investments. So I can share with you my personal experience as an investor and landlord to help you make the best decision for you. It would be my pleasure to help you and your fiancee find the right home for you.
0 votes Thank Flag Link Mon Oct 27, 2008
RH,
Based on your info given, you seem like a strong candidate to get a loan. To determine your price range, your best first step would be to work with a mortgage broker. Typically, it is 75% of the rental income that will count towards your income in determining your price range.

Financing changes drastically once you go past 4 family, it then becomes a commercial loan. Many mortgage brokers you work with for 1-4 family properties will not be able to help you with a 5 or larger.

Even if you buy a 2-4 family property, you can still consider using an LLC. Some lenders have issues with that, so that is something else you will need to discuss with the brooker and/or your lawyer. If you can't buy in an LLC, you can possibly transfer it into one, or into a Trust, afterwards. Check with your lawyer on all of the possibilities. That way, when you are ready to make an offer, you will know what the process will be.

When choosing an agent to work with, make sure he/she is familiar with multi-family properties. Regardless of what a loan officer tells you that you can qualify for, your agent should be able to help you with a cash flow analysis for a property to make sure that it is within your comfort level financially. You have to factor in some repairs and potential vacancy losses. If you push too close to your limit, a few small issues can cause big financial problems for you. As long as you buy smart, this is a great way to build wealth.
Web Reference: http://www.danrossre.com
0 votes Thank Flag Link Sun Oct 26, 2008
RH,

Please visit my website at http://www.ziprealty.com/agent/cadamo. As far as financing I have a mortgage consultant that can help you.

Cheryl Adamo
0 votes Thank Flag Link Sun Oct 26, 2008
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