Here's everything you need to know about FHA loans so you can make sure you don't run into any issues when you're ready to qualify → th-cam.com/video/S-v9ZxJevfo/w-d-xo.html
Do you have to stay living in the property until you hit the 25% equity mark, or are you able to move out after a year? Thank you for all you helpful information!!!
Personal Notez: - after one year if you have 25% equity in the property you are eligible for another FHA loan and you can repeat the process - lenders will probably ask for reserves, 3-6 months of mo/ mort payments - FHA requirement you need to live there for a year otherwise you might get occupancy fraud - after a year see if you can get a refinance into a conventional loan. That way you can drop off some mortgage payment
Thanks for watching! Here's some time stamps so you can skip to the parts you want and forget the parts you don't want! 0:30 House hacking in the investment world 0:46 What is house hacking? 0:58 The problems with getting an investment property 1:31 Fannie Mae's down payment requirement chart 2:12 How house hacking works 3:28 Why it's called house hacking 3:56 What to do when you want another property 4:48 Qualifying for an FHA loan and the minimum down payment 5:31 Banking requirements for multiple unit properties 6:37 Why buy an investment property with an FHA loan? 8:52 How to move out of the FHA loan into another property 9:50 Why refinancing into a conventional in the future might help 11:48 FHA as an option to start investing without the headache 🎧 Listen To The Podcast: plinkhq.com/i/1493715474 💰 7 Proven Ways To Save Thousands On Your Home: www.winthehouseyoulove.com/free Do you want to: ✅ Get pre-qualified? ✅ Schedule a call? ✅ Text me a question? ✅ Email me? ✅ Get a Realtor/LO referral? ➡️ Go to www.winthehouseyoulove.com/
@@jaybxnyc1 Not at all! When you refinance you're basically just re-doing the original loan. And then you can take out more than the original loan IF you choose to. Let's say you have a home worth $200,000 and a loan for $150,000. Refinances usually have around $2,000 in closing costs. So, you could refinance and have a new loan of $152,000. Or you could refinance and have a loan of $150,000 and pay $2,000 at closing. Or you could refinance to $160,000 and receive $60,000 in cash when you close. It's all up to you and how you want to set it up.
Excellent advice. I'm encouraging my brother to save for his first investment[so he can have tenants to help pay the mortgage]. In Boston prices are high but there's always the opportunity of you are ready and well informed. In already a landlord. It's not easy, but I'm glad the investment is providing dividends.
Man, love the channel! :) My wife and I are blind and are buying our first house, and we live in a sellers market which has always sparked our interest as we move up the socioeconomic ladder. Just found you the other day by accident, youtube suggested you after watching a few related vids. Super professional, accurate, and informative. Also straight to the point with swag. :)
@@WinTheHouseYouLove hey thanks a million for taking accessibility into consideration. Just keep being thorough and. You're doing a great job being accessible
Great Video ! My wife and I are learning everything we can now to hopefully invest in our first home sometime next year. We are in NYC so the cost of entry is extremely high.
Why do you need 25% before you can move into your next fha property? For some reason i thought after one year of living in the house you could go and do it again...
FHA wants you to use their insured loans to only buy a primary residence. The more equity you have in a home, the less risky it is to them, so they're more willing to lend to you again if they know their first loan they gave doesn't have as much risk.
@@WinTheHouseYouLove is this just to get another fha loan for another location? I was planning on get a place for a couple of years, renting it out when I leave and refinancing that fha to a conventional if it seemed reasonable given rates and such and buying using a conventional at my new location (single family residence)
Would it be possible to purchase a home with FHA loan and sell it right away or after living in it for 90 days? Currently looking to build a new home via FHA loan and then sell it due to the cheap price my contractor gave me and the resale price of homes in my area.
It's possible, but your lender is most likely going to get charged a penalty. This is called an Early Pay Off. It doesn't harm you in any way, but as lenders I don't like EPOs because they cost me money. I'd at least talk with your lender about it out of respect for them.
Thank you so much. I’ve been saving up to purchase my first investment property. I have over 20k saved already, I was thinking I need at least 20 more K’s to qualify for a down payment. Thank god I came across your video🙏🏾(I just subscribed)
You would contact your lender and let them know what you would like to do. They will either put the title in the LLC’s name and you will be obligated on the mortgage, or, you might have to refinance to have the LLC as the borrower on the mortgage.
I’m going to be a first time home buyer Looking to purchase a property then eventually looking to purchase a renters property. Could you make a video or direct me to a video on what to expect and what to do to purchase a home? Thank you I recently subscribed, very good channel
Awesome!! Sure thing: Fully Prepare To Buy A House (Step By Step Guide): th-cam.com/video/ujc7775SDEk/w-d-xo.html What To Expect During The Mortgage Process: th-cam.com/video/engzD-d8IOY/w-d-xo.html
My FHA loan for a 3 unit just got denied a day before closing. FHA said that the rent collected from the 3 unites would not cover the mortagage amount. They want the home to pay itself to qualify??? why is my income not being taken into account? plus they stemitaed the rent from two unites way below market. :(
Looking to buy a 2 unit home with basement with FHA loan, it's true the MIP is a cash flow killer. If I'm investing 25K after. Closing costs and I'm cash flowing only 400/month... It would take me 5 years to break even. What am I doing wrong?
The monthly MIP isn't always the worst thing in the world, but you don't want to keep it forever. Remember, you're just using the FHA loan to take advantage of a low down payment. Then, when you build up 20% equity, refinance into a Conventional loan and the mortgage insurance disappears. What's the purchase price? You'll want to look at your cap rate (annual net income/property value). A normal cap rate is between 4-10%. So, if you cash flow $400/mo and your property value is $100,000, then your cap rate is 4.80%. Also, $400/mo is only your realized gain. Don't forget that you have 3 sources of unrealized gain: (1) you're living rent free (2) your tenant is paying principal as a part of the mortgage payment which you will get when you sell (3) you're getting paid while holding onto an appreciating asset on average growing at 3%/yr.
@@WinTheHouseYouLove Thank you for responding and for the great content! Purchase price is around 320,000 with taxes averaging 8,000/yr. This would be my first investment and I'm ready to go head on but trying to prepare as much as possible. Just got pre-qualified!
@@WinTheHouseYouLove Can i use conventional loan? since conventional loan also has an advantage of low down payment like 3% right? So what's the benefit of going FHA if i have good credit score and income? Great video by the way
@9:41 so does that mean if i hit 25% mark i dont ve to sell the 1st property ! & still i can get another property with applying again to FHA ? Still Or i must sell the 1st one to apply for the 2nd one via FHA
If you already have a home with lots of equity but don't have enough for a down payment of 20% or more would an FHA loan be a good way to go? I realize I would have to rent out my current home and move into a multi unit.
Hey I have a question. So i'm 20 and have 25k saved and I live with my parents for free, and I want to continue to live with them and buy a property to rent out what loan do I have to get? or should I buy a house and just pay 12 months mortgage then rent it out?
Either works. If you purchase it outright as an investment, you'll need 15% down. If you purchase it to live in it for a year, you'd only need 3% down.
i know this might be a odd question.... if i apply for a fha home loan and buy a fixer upper can i use some of that home loan to fix up my new house or do i have to use my own money to fix up my new home???
Can I refi my FHA mortgage to conventional after 20% paid off mortgage then take equity from home via CaSH/heloc for 2nd home for primary residence using an FHA loan and rent out the 1st home for income that was refied into conventional loan?
Can you gget an fha loan if the other apartments are rented out to your LLC. In example I build a recording studio on one floor and rent it out to my LLC and then live on the other floor
That's difficult! You'll want to see if you can get approved for more. You could possibly see if you could use rental income to offset the mortgage payment or add a co-borrower on the loan. Also, you might consider buying a single-family home and then renting it out after a year.
Hi, I just watched your video on FHA Loan. Can u help me get a 4-unit multi-family property in Houston Texas using the FHA 203K loan as a primary residence?
Thank you for your value. Question, can I house hack with FHA on a construction to perm loan on a 4plex? Also, Can you give me an example of what you mean when you say "once you hit 25% in equity" are you saying once 25% of the loan is payed?
Question man! So let’s say Ives lived in this primary home for about 5 years and now I’m trying to refinance it and put tenants could I use that refinance money to put 3.5% down on a triplex? And live in one doubles for a year and do it again? With that being say I would have 4 tenant 1 from the primary home that I’ve refinance and 3 from the triplex I’ve built on a fha loan?
So you’re basically not profiting off the duplex at all? Since the renter is paying off the mortgage and you’re living there for free? Lol how do you have cash flow from that
Oh you're absolutely profiting. Duplexes usually don't have high net cash flow at the start since you're living in the property. However, you live for free, which increases your cash flow by whatever it would have cost to live. For instance, if it would have cost you $1,000 on the mortgage, someone paying that off mean you have positive $1,000 monthly cash flow on your personal budget. Most of the profit you're gaining in an owner-occupied investment is cash flow from decreased housing expense and unrealized gain in paying off the loan and gaining appreciation. Then, when you move out, you get a higher net cash flow as gross revenue increases.
ok but what is the benefit of FHA vs Convention where you can do the same thing with convention with 3% down (or 5 if you can afford). With current cheap interest you don't really want to refinance in the future so conventional is better and you can avoid PMI right?
Still depends on you. BUT, it is wise to consider hiring a property manager if: You have lots of properties or rental units. The more rental properties you own and the more units they contain, the more you're likely to benefit from a management company. You don't live near your rental property. :)
If you did this house hack on three houses and lived in one of them permanently, how would you protect your other two assets? Do you transfer them to an LLC?
Super helpful video! One thing I noticed though - Is you actually can house hack with a single family home! :) There many options such as rent by the room and subdividing the house itself to allow for tenants under your same roof
Love your videos by the way but anyway you look so familiar like the way you talk and the way you look when you talk is just like this actor I can’t seem to figure out but if uou know like you get it all the time please tell me who so I can move on from this
Lets say i have 15% now to purchase an investment property. Also, lets say i just purchased my primary residence a few months back with fha. Can i still go get an investment property and stay in my fha home with 15%? Or do i still have to stay in my fha home for a year then go put a down payment down on a conventional. Mind u, im still wanting to stay in my fha home and not refinance yet because it doesnt have 25% equity yet, but i want to go purchase another home with my reserves.
At closing, you'll have to sign a document certifying you'll live in the property (usually for a year). I'm not aware of all the technology that could be used in the event of an audit. But, loans get audited for quality very frequently by GSEs or HUD. (This is because the 2008 house crash was caused by poor-performing and dishonest loans) Even something as simple as your mailing address or registered address changing to a different property other than the one you signed as your primary residence could cause an auditor to look closer and investigate mortgage/occupancy fraud.
Personally, I'd go conventional if you have that much to put down. You'll have much greater interest savings and you won't have to pay any FHA mortgage insurance
Let's say you buy a primary residence or an investment property with FHA. I know there's a requirement to live in the property for the a year but what if the home or the only available unit isn't liveable yet then what do you do? Not Liveable as in you need new everything and nothing up to your standards of living.
If it's a normal FHA loan, you have to move in within 60 days. If it's an FHA 203k, you can wait until repairs are completed (which is allowed up to 6 months)
How do u get to 25% equity? Does that mean u have to pay 25% of the mortgage? Or increase the value of the property? I see you give a link a few comments above mines.. nvm
One question i have is for those who have gone to buy a house, how was the process when you decided to buy other fha homes after the 12 months, dont you get issues with the debt to income ration monthly during process?? Please explain how does that work, like can you buy 10 houses in 10 years by only making 100k a year??
Can one still buy a multifamily at 3.5 down? I hace seen videos of other people claiming that if the property appraisers as a multifamily then you have to put 25% down.
So would I be eligible for a bank loan for rental property if I am on disability? I have some money saved but have very little monthly income? What would you suggest? Thanks!
Mr Win The House You Love- Hi I have a question. Is all this still possible to do with this whole pandemic going on? I would need to start saving for at least 1 year in order to build a cash cushion along with a down payment for an fha loan. But im worried this pandemic is going to make this impossible? Any advice from you or others on this would be highly appreciated
Thinking of buying my first single family home just a 3 bedroom 2 bath house with an fha. If I live in it for a year then move and buy another property and begin to rent that house out. Is that acceptable as long as I lived in it for a year?
If you were do a FHA house hack that needs renovation, can you do the renovations and after a couple years, it could hypothetically be appraised for 25% more than what you paid for it? In other words, the ARV should be at least 25% greater than what you paid in order for you to be able to refinance after 1 to 2 years? Did I get that right?
Can I house hack a town house and rent out the other rooms while I live in it for a year? Or is that mortgage fraud. I'm seeing conflicting information so if someone could clear this up for me i'd really appreciate it!
@Cam Christian is it better to buy the property with the larger down payment to avoid mortgage insurance in every instance if you have the money for it?
Love your videos mate - but just a minor production tip (which you might've already received): small patterns on shirts, especially eccentric ones like this video, give the camera a really hard time. I'd recommend just a plain color or something with large patterns. Then you won't have moire like you can see in this video. Cheers!
Can I refinance my fha loan to a conventional loan, on a property that I have lived in for two years, then rent that property out, while purchasing a new investment property using a new fha loan? Without 25% equity.
do they allow properties that have 2 homes on 1 lot? or do they have to have shared walls like apartment? thank you enjoying your videos and your personality.
Kyle, I currently have a home with an fha loan in NY and I will be relocating to Florida for my job at the end of the year. I am looking to purchase a second home with an fha loan, but I’m worried that I won’t get approved because of the debt to income ratio between both of the mortgages.
Thanks for commenting! To see if you can qualify for a loan, you'll want to reach out to a loan officer who can help. You can click Apply on my website (www.winthehouseyoulove.com/) to be connected with a loan officer I trust.
Newbie here. Can someone explain what 25% equity means? Is it saying you're 75% done with the mortgage on the home? Thank you! I’m also open to videos/articles that explain exactly how equity works.
Welcome! Value Of The Home - Mortgage Balance = Equity Think of it like this: it's how much money you would get if you sold the house. You might find this video I have on equity interesting! → th-cam.com/video/YBs0mZffvH4/w-d-xo.html
I was thinking about doing this, but is it worth it if your only breaking even. You have no money to fix things if something goes wrong in other units, correct?
You’re not breaking even if someone’s paying down a mortgage. It might not be cash flow heavy up-front, but you have unrealized gain when you sell in the future. With all investments, having an emergency fund is best. You don’t want to depend on cash flow to support needed repairs.
Kyle Seagraves - Mortgage Advisor I’ve herd of taken a fha loan for the 1 year then switching it to a conventional loan to repeat a fha loan process. What do you think of this?
It’s a great strategy! Look up “house hacking” or “brrr method” on TH-cam. There a lot of people smarter than me with great info on getting started and the details of it all :)
Okay so if I put a 25% down payment on a duplex with an fha loan after 1 year I can move out and get another loan for another rental property? What is better a bigger or smaller down payment when doing this process. Also what would be better a 20 or 30 year mortgage
That is correct! FHA will require you to live in the property. A bigger down payment and a shorter mortgage terms is always better because those will both set up your loans to have the lowest interest cost possible.
Hi, I’m trying to buy my second property investment but the bank is making it difficult. They told me I couldn’t quality for a conventional loan as I make more than $87k. What other options do I have?
Conventional loans for investment properties don't have an income limit. It sounds like you're trying to purchase an investment property, but they think you're wanting to buy a second home. Let them know you want to purchase an investment property. If you want to buy with FHA, you have to live in the property.
Win The House You Love but if I tell them that I want to buy an investment property then I would have to put down 20% which I’m not able to. I’m not allow to use another FHA loan as o already used it with my first property. So to buy my second property, I need a conventional loan to be able to put down 5% right?
You can only use the 5% down on a conventional loan if you live in the property. So, you could rent out your current home and move into a new one that you put 5% down on. Otherwise, you’ll need an investment loan. Ours start at 15% down minimum.
Hey, great video, thanks a lot. I really like the background design there is great feng shui. So I don’t show a lot of income on my tax returns because I’m self-employed, how difficult will it be to refinance if I get a cosigner and how’s that for a year, have 25 to 50% equity? I basically just want to be able to refinance and repeat this process once a year and I’m hoping that the equity I have in the home plus the income will help me refinance, how do I know if this will work? I’m thinking about asking several banks
Thanks so much! If your co-borrower has good income, it's not too difficult to refinance with a co-borrower. You usually will need about 25% equity to repeat the process with another FHA loan.
This was actually my plan for my next rental but first multi family. I plan to buy a 4 family and live in one of the units. However I was not aware of the 25% equity. Is that before I could move or before I could use another FHA loan?
FHA waiting periods: - Ch 7 BK: wait 2 years from discharge - Ch 13 BK: 1 year on-time payments and court approval is needed - Foreclosure: wait 3 years from deed transfer
my question is if you get an fha loan for a single family, and after living in it for a year you decide to refinance to a conventional loan, are you now able to use it as a fully operating investment property? since it's not under and fha loan anymore?
Yes, IF you meet the equity requirements found here: singlefamily.fanniemae.com/media/20786/display It would actually be easier to just keep the FHA loan. After a year you can use it as an investment property. Then just purchase a new home with a Conventional loan.
Hi Kyle, we want to begin the process of purchasing rental property using the house hacking method. The part I’m confused about is purchasing the second property using the FHA loan. We want to keep the first one, and after a year move into the second one. Do you have to refinance or can you get another FHA loan while having one on the first property? We want to use this method for five years to purchase 5 properties. Thanks!
FHA will allow you to have 2 FHA loans at the same time, but it comes with some tight circumstances. Usually, you need to have an increase in family size or job relocation. If you can document an increase in family size or a job relocation, then it will work for two FHA loans. If not, you'll most likely need to refinance the first loan to a conventional investment loan.
Ok, we’re definitely gonna have to refinance to a conventional loan. Are there any rules we need to know of before doing so? Or is it just waiting out the year?
You'll usually need to hit 85% loan-to-value ratio to refi into a conventional. So, by the time you live in it for a year, pay down the mortgage, and get some appreciation (possibly from repairs) you should be able to hit that mark.
You're very welcome! Let me know if you'd like me to connect you with someone in our company to help you set up a game plan (my contact info is in the description)
Great video! I'm looking to get into investing with little money down. Where can I find fha properties? If I'm looking at all the homes for sale, how would I know which one we would qualify?
Here's everything you need to know about FHA loans so you can make sure you don't run into any issues when you're ready to qualify → th-cam.com/video/S-v9ZxJevfo/w-d-xo.html
Do you have to stay living in the property until you hit the 25% equity mark, or are you able to move out after a year? Thank you for all you helpful information!!!
Mannnn....this was really informative between you and BiggerPockets I’m learning a lot. Thank you, keep it up.
Thank you so much!! Best of luck in your investing journey!
Did you try to house hack?
Personal Notez:
- after one year if you have 25% equity in the property you are eligible for another FHA loan and you can repeat the process
- lenders will probably ask for reserves, 3-6 months of mo/ mort payments
- FHA requirement you need to live there for a year otherwise you might get occupancy fraud
- after a year see if you can get a refinance into a conventional loan. That way you can drop off some mortgage payment
Thanks for watching. :)
Thanks for watching! Here's some time stamps so you can skip to the parts you want and forget the parts you don't want!
0:30 House hacking in the investment world
0:46 What is house hacking?
0:58 The problems with getting an investment property
1:31 Fannie Mae's down payment requirement chart
2:12 How house hacking works
3:28 Why it's called house hacking
3:56 What to do when you want another property
4:48 Qualifying for an FHA loan and the minimum down payment
5:31 Banking requirements for multiple unit properties
6:37 Why buy an investment property with an FHA loan?
8:52 How to move out of the FHA loan into another property
9:50 Why refinancing into a conventional in the future might help
11:48 FHA as an option to start investing without the headache
🎧 Listen To The Podcast: plinkhq.com/i/1493715474
💰 7 Proven Ways To Save Thousands On Your Home: www.winthehouseyoulove.com/free
Do you want to:
✅ Get pre-qualified?
✅ Schedule a call?
✅ Text me a question?
✅ Email me?
✅ Get a Realtor/LO referral?
➡️ Go to www.winthehouseyoulove.com/
www.winthehouseyoulove.com/
When you say do the FHA loan are you referring to FHA in general or being a 1st time homebuyer?
@@jaybxnyc1 FHA loans in general. FHA loans don't distinguish between first-time homebuyers and repeat buyers.
Follow up question, when you refinance your home, do you HAVE to take out the entire amount of the ARV ?
@@jaybxnyc1 Not at all! When you refinance you're basically just re-doing the original loan. And then you can take out more than the original loan IF you choose to.
Let's say you have a home worth $200,000 and a loan for $150,000. Refinances usually have around $2,000 in closing costs.
So, you could refinance and have a new loan of $152,000. Or you could refinance and have a loan of $150,000 and pay $2,000 at closing.
Or you could refinance to $160,000 and receive $60,000 in cash when you close.
It's all up to you and how you want to set it up.
Excellent advice. I'm encouraging my brother to save for his first investment[so he can have tenants to help pay the mortgage]. In Boston prices are high but there's always the opportunity of you are ready and well informed. In already a landlord. It's not easy, but I'm glad the investment is providing dividends.
Thanks! That's a great plan!
Man, love the channel! :) My wife and I are blind and are buying our first house, and we live in a sellers market which has always sparked our interest as we move up the socioeconomic ladder. Just found you the other day by accident, youtube suggested you after watching a few related vids. Super professional, accurate, and informative. Also straight to the point with swag. :)
Thank you so so much! And congratulations on the new home!
What can I work on to make the videos more accessible?
@@WinTheHouseYouLove hey thanks a million for taking accessibility into consideration. Just keep being thorough and. You're doing a great job being accessible
This answered a lot my questions, Thank You!
You're welcome, thanks for watching!
Great Video ! My wife and I are learning everything we can now to hopefully invest in our first home sometime next year. We are in NYC so the cost of entry is extremely high.
Thanks!! Great plan!
Why do you need 25% before you can move into your next fha property? For some reason i thought after one year of living in the house you could go and do it again...
FHA wants you to use their insured loans to only buy a primary residence. The more equity you have in a home, the less risky it is to them, so they're more willing to lend to you again if they know their first loan they gave doesn't have as much risk.
@@WinTheHouseYouLove is this just to get another fha loan for another location? I was planning on get a place for a couple of years, renting it out when I leave and refinancing that fha to a conventional if it seemed reasonable given rates and such and buying using a conventional at my new location (single family residence)
Would it be possible to purchase a home with FHA loan and sell it right away or after living in it for 90 days? Currently looking to build a new home via FHA loan and then sell it due to the cheap price my contractor gave me and the resale price of homes in my area.
It's possible, but your lender is most likely going to get charged a penalty. This is called an Early Pay Off. It doesn't harm you in any way, but as lenders I don't like EPOs because they cost me money.
I'd at least talk with your lender about it out of respect for them.
Thank you so much. I’ve been saving up to purchase my first investment property. I have over 20k saved already, I was thinking I need at least 20 more K’s to qualify for a down payment. Thank god I came across your video🙏🏾(I just subscribed)
Thank you so much for watching!! :)
After a year of living in the property, how do you move the property to your LLC?
You would contact your lender and let them know what you would like to do. They will either put the title in the LLC’s name and you will be obligated on the mortgage, or, you might have to refinance to have the LLC as the borrower on the mortgage.
I love all your videos, so educational! I wish I found you a longggg time ago. I’m 35 and looking to purchase my first home soon.
Thank you so much!! I'm glad you're here :)
Did you follow through with it?
do you love me too?
Thank you for sharing the knowledge. I have listened to many channels and yours is one of the most valuable channels.
Thanks so much!
Hi Kyle! I have a suggestion for content: multi family house hacking 3-4 units with student loan debt.
Brilliant suggestion!
I’m going to be a first time home buyer Looking to purchase a property then eventually looking to purchase a renters property. Could you make a video or direct me to a video on what to expect and what to do to purchase a home? Thank you I recently subscribed, very good channel
Awesome!! Sure thing:
Fully Prepare To Buy A House (Step By Step Guide): th-cam.com/video/ujc7775SDEk/w-d-xo.html
What To Expect During The Mortgage Process: th-cam.com/video/engzD-d8IOY/w-d-xo.html
My FHA loan for a 3 unit just got denied a day before closing. FHA said that the rent collected from the 3 unites would not cover the mortagage amount. They want the home to pay itself to qualify??? why is my income not being taken into account? plus they stemitaed the rent from two unites way below market. :(
Looking to buy a 2 unit home with basement with FHA loan, it's true the MIP is a cash flow killer. If I'm investing 25K after. Closing costs and I'm cash flowing only 400/month... It would take me 5 years to break even. What am I doing wrong?
The monthly MIP isn't always the worst thing in the world, but you don't want to keep it forever. Remember, you're just using the FHA loan to take advantage of a low down payment. Then, when you build up 20% equity, refinance into a Conventional loan and the mortgage insurance disappears.
What's the purchase price? You'll want to look at your cap rate (annual net income/property value). A normal cap rate is between 4-10%.
So, if you cash flow $400/mo and your property value is $100,000, then your cap rate is 4.80%.
Also, $400/mo is only your realized gain. Don't forget that you have 3 sources of unrealized gain: (1) you're living rent free (2) your tenant is paying principal as a part of the mortgage payment which you will get when you sell (3) you're getting paid while holding onto an appreciating asset on average growing at 3%/yr.
@@WinTheHouseYouLove Thank you for responding and for the great content! Purchase price is around 320,000 with taxes averaging 8,000/yr. This would be my first investment and I'm ready to go head on but trying to prepare as much as possible. Just got pre-qualified!
@@WinTheHouseYouLove Can i use conventional loan? since conventional loan also has an advantage of low down payment like 3% right? So what's the benefit of going FHA if i have good credit score and income? Great video by the way
Best video ever on this type of information.
Thanks!!
@9:41 so does that mean if i hit 25% mark i dont ve to sell the 1st property ! & still i can get another property with applying again to FHA ? Still
Or i must sell the 1st one to apply for the 2nd one via FHA
If you already have a home with lots of equity but don't have enough for a down payment of
20% or more would an FHA loan be a good way to go?
I realize I would have to rent out my current home and move into a multi unit.
Hey I have a question. So i'm 20 and have 25k saved and I live with my parents for free, and I want to continue to live with them and buy a property to rent out what loan do I have to get? or should I buy a house and just pay 12 months mortgage then rent it out?
And I only wanna buy a single family home
Either works. If you purchase it outright as an investment, you'll need 15% down.
If you purchase it to live in it for a year, you'd only need 3% down.
I have added you to my go to financial channels with Dave Ramsey and Graham Stephan
Wow, thanks! Those two are legends!!
@@WinTheHouseYouLove Straightforward, helpful, accurate advice without any BS. What's not to like?
i know this might be a odd question....
if i apply for a fha home loan and buy a fixer upper can i use some of that home loan to fix up my new house or do i have to use my own money to fix up my new home???
Hello, new follower here! I know this video is a bit older. Will someone know if this also applies for Room hacking?
How do you make 25% of equity in one year? That sound not doable.
For most, one year is too difficult. It may take longer, but one year is the minimum - Kyle Seagraves winthehouseyoulove.com
Can I refi my FHA mortgage to conventional after 20% paid off mortgage then take equity from home via CaSH/heloc for 2nd home for primary residence using an FHA loan and rent out the 1st home for income that was refied into conventional loan?
You absolutely can!
Can you gget an fha loan if the other apartments are rented out to your LLC. In example I build a recording studio on one floor and rent it out to my LLC and then live on the other floor
How can I find I realtor that is familiar with house hacking?
When you move out you gotta change homeowners insurance to commercial
And do you also need a 500 credit score minimum ? To even get started with a FHA loan?
Yes
How can I buy a multifamily when the amount I was approved for is less than the units on the market. One problem I am running into : alot are vacant.
That's difficult! You'll want to see if you can get approved for more. You could possibly see if you could use rental income to offset the mortgage payment or add a co-borrower on the loan. Also, you might consider buying a single-family home and then renting it out after a year.
Kyle, I have a question. Can I get a FHA if I build my own quadplex? The market on a quadplex is too high. I’d rather build and get it a lot cheaper.
To my knowledge, FHA construction only works for 1-unit
Hi, I just watched your video on FHA Loan. Can u help me get a 4-unit multi-family property in Houston Texas using the FHA 203K loan as a primary residence?
Thank you for your value. Question, can I house hack with FHA on a construction to perm loan on a 4plex? Also, Can you give me an example of what you mean when you say "once you hit 25% in equity" are you saying once 25% of the loan is payed?
Question man! So let’s say Ives lived in this primary home for about 5 years and now I’m trying to refinance it and put tenants could I use that refinance money to put 3.5% down on a triplex? And live in one doubles for a year and do it again? With that being say I would have 4 tenant 1 from the primary home that I’ve refinance and 3 from the triplex I’ve built on a fha loan?
Love the clear info and lack of "I turned 5$ into 500k in 30 minutes by doing *this*" BS you see all over youtube. Subscribed!
You can’t have more than one FHA loan. You have to refinance or 25% down or apprised This is miss leading. All this need capital.
Yes you can: www.rocketmortgage.com/learn/how-many-fha-loans-can-you-have
So you’re basically not profiting off the duplex at all? Since the renter is paying off the mortgage and you’re living there for free? Lol how do you have cash flow from that
Oh you're absolutely profiting. Duplexes usually don't have high net cash flow at the start since you're living in the property. However, you live for free, which increases your cash flow by whatever it would have cost to live. For instance, if it would have cost you $1,000 on the mortgage, someone paying that off mean you have positive $1,000 monthly cash flow on your personal budget. Most of the profit you're gaining in an owner-occupied investment is cash flow from decreased housing expense and unrealized gain in paying off the loan and gaining appreciation. Then, when you move out, you get a higher net cash flow as gross revenue increases.
ok but what is the benefit of FHA vs Convention where you can do the same thing with convention with 3% down (or 5 if you can afford). With current cheap interest you don't really want to refinance in the future so conventional is better and you can avoid PMI right?
This is powerful and very important. 😳👍🏽👍🏽👍🏽😊 Thank you
Glad it was helpful!
Thank you for this video 🙏🏼
Can I live with a roommate on the side of the duplex I’m going to be living in?
You sure can
how many times can you repeat this process until you can't use the FHA loan anymore?
Following..
As long as you refinance the intial into a conventional, unlimited.
Win The House You Love okay, thanks
Can you get a property manager even if you live in the property?
Still depends on you. BUT, it is wise to consider hiring a property manager if: You have lots of properties or rental units. The more rental properties you own and the more units they contain, the more you're likely to benefit from a management company. You don't live near your rental property. :)
If you did this house hack on three houses and lived in one of them permanently, how would you protect your other two assets? Do you transfer them to an LLC?
FHA doesn’t allow you to transfer a deed into an LLC
I would love to see a video about how to choose a good investment property. Is location key?
Great suggestion!! Location is always key :)
Super helpful video! One thing I noticed though - Is you actually can house hack with a single family home! :) There many options such as rent by the room and subdividing the house itself to allow for tenants under your same roof
You can do that as well :)
Love your videos by the way but anyway you look so familiar like the way you talk and the way you look when you talk is just like this actor I can’t seem to figure out but if uou know like you get it all the time please tell me who so I can move on from this
Haha I'm not sure!
Getting an fha loan a 2nd time can be tricky tho, u can't just get another one so easily
There are certain criteria you have to hit for sure
Does anyone know if Down Payment Assistance can be used in this case? An fha for multifamily units?
I thought you could drop PMI with the FHA loan once you reach 25% equity?
Is it smart to BRRRR with an FHA on a multi family? Then go do it again?
That would probably be best answered by someone more in the investing space :)
Thank you. You're a well spoken genius.
I appreciate that!
So is it illegal to buy a house with an FHA loan, stay there for a year, then rent it out to someone else ?
Nope, tons of people do it
Lets say i have 15% now to purchase an investment property. Also, lets say i just purchased my primary residence a few months back with fha. Can i still go get an investment property and stay in my fha home with 15%? Or do i still have to stay in my fha home for a year then go put a down payment down on a conventional. Mind u, im still wanting to stay in my fha home and not refinance yet because it doesnt have 25% equity yet, but i want to go purchase another home with my reserves.
Yes, you can do that, no problem at all
How do they confirm that you are living in one of the units? Do they really check?
At closing, you'll have to sign a document certifying you'll live in the property (usually for a year).
I'm not aware of all the technology that could be used in the event of an audit. But, loans get audited for quality very frequently by GSEs or HUD. (This is because the 2008 house crash was caused by poor-performing and dishonest loans)
Even something as simple as your mailing address or registered address changing to a different property other than the one you signed as your primary residence could cause an auditor to look closer and investigate mortgage/occupancy fraud.
Say you can afford a 25% down payment. Is there still a benefit in using an FHA 3.5% down payment loan?
Personally, I'd go conventional if you have that much to put down. You'll have much greater interest savings and you won't have to pay any FHA mortgage insurance
This video was everything!!! Thanks Kyle
Glad to help!
Let's say you buy a primary residence or an investment property with FHA. I know there's a requirement to live in the property for the a year but what if the home or the only available unit isn't liveable yet then what do you do? Not Liveable as in you need new everything and nothing up to your standards of living.
If it's a normal FHA loan, you have to move in within 60 days. If it's an FHA 203k, you can wait until repairs are completed (which is allowed up to 6 months)
How do u get to 25% equity? Does that mean u have to pay 25% of the mortgage? Or increase the value of the property?
I see you give a link a few comments above mines.. nvm
Yep! Either by paying down the mortgage or increasing the property value. Or both :)
One question i have is for those who have gone to buy a house, how was the process when you decided to buy other fha homes after the 12 months, dont you get issues with the debt to income ration monthly during process?? Please explain how does that work, like can you buy 10 houses in 10 years by only making 100k a year??
There are some channels on housing hacking that might help
Can one still buy a multifamily at 3.5 down? I hace seen videos of other people claiming that if the property appraisers as a multifamily then you have to put 25% down.
Hi! For more information, you can check their website and see if you qualify.
Here's the link: www.hud.gov/buying/loans
So would I be eligible for a bank loan for rental property if I am on disability? I have some money saved but have very little monthly income? What would you suggest? Thanks!
Yep! You can use SSDI no problem
Mr Win The House You Love- Hi I have a question. Is all this still possible to do with this whole pandemic going on? I would need to start saving for at least 1 year in order to build a cash cushion along with a down payment for an fha loan. But im worried this pandemic is going to make this impossible? Any advice from you or others on this would be highly appreciated
It sure is possible :)
Thinking of buying my first single family home just a 3 bedroom 2 bath house with an fha. If I live in it for a year then move and buy another property and begin to rent that house out. Is that acceptable as long as I lived in it for a year?
Hi! Some people do that.. it's totally up to you.
Can I buy a 2 family home with a FHA loan? Then rent out the upper half? While I live at the bottom half? Is that ok?
Yep!
What's does "primary residency" mean? I work from home. Could I just go to that home and work 8 hours a day 5 days a week?
Hi! Primary residence is your main residence, you have to live in the home as if it's your HQ. :)
If you were do a FHA house hack that needs renovation, can you do the renovations and after a couple years, it could hypothetically be appraised for 25% more than what you paid for it?
In other words, the ARV should be at least 25% greater than what you paid in order for you to be able to refinance after 1 to 2 years? Did I get that right?
Yep, you'll need 25% equity to refi
Can I house hack a town house and rent out the other rooms while I live in it for a year? Or is that mortgage fraud. I'm seeing conflicting information so if someone could clear this up for me i'd really appreciate it!
If you live in it that's fine
Are there some lenders that would do 20% instead of 25% equity for a quadplex? Our refi is gonna be close I think around 20-25%
Unfortunately no, it's an FHA guidelines
You would have to move 100 miles away and it would have to be work related in order to get the 2nd FHA loan right?
I have a video on this :)
th-cam.com/video/WSnAAJ2LKcg/w-d-xo.html
Can or should you house hack with a conventional loan?
@Cam Christian is it better to buy the property with the larger down payment to avoid mortgage insurance in every instance if you have the money for it?
You'd want to compare both scenarios side by side
You cant have more than one FHA loan going at a time..You would have to pay that mortgage off first..
Yes you can → th-cam.com/video/WSnAAJ2LKcg/w-d-xo.html
Love your videos mate - but just a minor production tip (which you might've already received): small patterns on shirts, especially eccentric ones like this video, give the camera a really hard time. I'd recommend just a plain color or something with large patterns. Then you won't have moire like you can see in this video. Cheers!
Thanks for the tip! Try checking my recent videos out, I am now wearing plain shirt. :) Enjoy watching! :)
I need some clarification please. When you say 25%. Is that 25% paid off on the loan or 25% remaining balance of the loan?
25% equity :)
so i can get fha loan, live in one unit while renting out the others and then after a while move out? this is one of my biggest dreams!!!
That's a nice plan! Best of luck!
Can I refinance my fha loan to a conventional loan, on a property that I have lived in for two years, then rent that property out, while purchasing a new investment property using a new fha loan? Without 25% equity.
You can, but FHA wants you to have 25% equity before they'll consider that rental income
do they allow properties that have 2 homes on 1 lot? or do they have to have shared walls like apartment? thank you enjoying your videos and your personality.
Yes, they do allow that, just make sure that you will live in one of the homes. Best of luck!
Kyle, I currently have a home with an fha loan in NY and I will be relocating to Florida for my job at the end of the year. I am looking to purchase a second home with an fha loan, but I’m worried that I won’t get approved because of the debt to income ratio between both of the mortgages.
Thanks for commenting! To see if you can qualify for a loan, you'll want to reach out to a loan officer who can help. You can click Apply on my website (www.winthehouseyoulove.com/) to be connected with a loan officer I trust.
Newbie here. Can someone explain what 25% equity means? Is it saying you're 75% done with the mortgage on the home? Thank you! I’m also open to videos/articles that explain exactly how equity works.
Welcome!
Value Of The Home - Mortgage Balance = Equity
Think of it like this: it's how much money you would get if you sold the house.
You might find this video I have on equity interesting! → th-cam.com/video/YBs0mZffvH4/w-d-xo.html
Win The House You Love cool thanks!
I was thinking about doing this, but is it worth it if your only breaking even. You have no money to fix things if something goes wrong in other units, correct?
You’re not breaking even if someone’s paying down a mortgage. It might not be cash flow heavy up-front, but you have unrealized gain when you sell in the future. With all investments, having an emergency fund is best. You don’t want to depend on cash flow to support needed repairs.
Kyle Seagraves - Mortgage Advisor I’ve herd of taken a fha loan for the 1 year then switching it to a conventional loan to repeat a fha loan process. What do you think of this?
It’s a great strategy! Look up “house hacking” or “brrr method” on TH-cam. There a lot of people smarter than me with great info on getting started and the details of it all :)
Okay so if I put a 25% down payment on a duplex with an fha loan after 1 year I can move out and get another loan for another rental property? What is better a bigger or smaller down payment when doing this process. Also what would be better a 20 or 30 year mortgage
That is correct! FHA will require you to live in the property. A bigger down payment and a shorter mortgage terms is always better because those will both set up your loans to have the lowest interest cost possible.
Hi, I’m trying to buy my second property investment but the bank is making it difficult. They told me I couldn’t quality for a conventional loan as I make more than $87k. What other options do I have?
They’re also telling me I can’t buy the second house close to my first
Conventional loans for investment properties don't have an income limit.
It sounds like you're trying to purchase an investment property, but they think you're wanting to buy a second home. Let them know you want to purchase an investment property.
If you want to buy with FHA, you have to live in the property.
Win The House You Love but if I tell them that I want to buy an investment property then I would have to put down 20% which I’m not able to. I’m not allow to use another FHA loan as o already used it with my first property. So to buy my second property, I need a conventional loan to be able to put down 5% right?
You can only use the 5% down on a conventional loan if you live in the property.
So, you could rent out your current home and move into a new one that you put 5% down on.
Otherwise, you’ll need an investment loan. Ours start at 15% down minimum.
Win The House You Love right. But apparently the new rule is that if you make more than $87k you don’t quality for a conventional loan.
Hey, great video, thanks a lot. I really like the background design there is great feng shui. So I don’t show a lot of income on my tax returns because I’m self-employed, how difficult will it be to refinance if I get a cosigner and how’s that for a year, have 25 to 50% equity? I basically just want to be able to refinance and repeat this process once a year and I’m hoping that the equity I have in the home plus the income will help me refinance, how do I know if this will work? I’m thinking about asking several banks
Thanks so much!
If your co-borrower has good income, it's not too difficult to refinance with a co-borrower. You usually will need about 25% equity to repeat the process with another FHA loan.
Wait can’t you only take 1 FHA once
Nope
Hello,
What about a Single family unit?
Can you use an FHA and occupy one room and rent out the other rooms?
Yes
This was actually my plan for my next rental but first multi family. I plan to buy a 4 family and live in one of the units. However I was not aware of the 25% equity. Is that before I could move or before I could use another FHA loan?
Before you can use another FHA loan
Hi Kyle, Can I do this investment property using FHA loan if I have a bankruptcy?
FHA waiting periods:
- Ch 7 BK: wait 2 years from discharge
- Ch 13 BK: 1 year on-time payments and court approval is needed
- Foreclosure: wait 3 years from deed transfer
Can you use a 203k loan on an existing single family residence, refinance to the fha loan and then convert it into a multiunit residence?
You sure can!
my question is if you get an fha loan for a single family, and after living in it for a year you decide to refinance to a conventional loan, are you now able to use it as a fully operating investment property? since it's not under and fha loan anymore?
Yes, IF you meet the equity requirements found here: singlefamily.fanniemae.com/media/20786/display
It would actually be easier to just keep the FHA loan. After a year you can use it as an investment property. Then just purchase a new home with a Conventional loan.
Hi Kyle, we want to begin the process of purchasing rental property using the house hacking method. The part I’m confused about is purchasing the second property using the FHA loan. We want to keep the first one, and after a year move into the second one. Do you have to refinance or can you get another FHA loan while having one on the first property? We want to use this method for five years to purchase 5 properties. Thanks!
FHA will allow you to have 2 FHA loans at the same time, but it comes with some tight circumstances. Usually, you need to have an increase in family size or job relocation. If you can document an increase in family size or a job relocation, then it will work for two FHA loans. If not, you'll most likely need to refinance the first loan to a conventional investment loan.
Ok, we’re definitely gonna have to refinance to a conventional loan. Are there any rules we need to know of before doing so? Or is it just waiting out the year?
You'll usually need to hit 85% loan-to-value ratio to refi into a conventional. So, by the time you live in it for a year, pay down the mortgage, and get some appreciation (possibly from repairs) you should be able to hit that mark.
Kyle Seagraves - Mortgage Advisor thank you so much Kyle!
You're very welcome! Let me know if you'd like me to connect you with someone in our company to help you set up a game plan (my contact info is in the description)
Great video! I'm looking to get into investing with little money down. Where can I find fha properties? If I'm looking at all the homes for sale, how would I know which one we would qualify?
Thanks! There isn't a list, but you can always ask the listing agent if they think the condition would pass an FHA appraisal.
Thank so much for all this information, I guess I have to look for a job around the area where you moving to...?
Thank you so much for watching!! :) I'm not sure what you mean by work on the area
Can you use an FHA loan to purchase a mobile home to place on rural land? Or does the FHA loan only apply to a traditional house?
I believe there are some programs that would allow this, but I'm not too familiar
How do you report the earnings to the IRS?
What if the multifamily you are buying doesnt have an vacant unit to move into but my intent was to make it my primary residence?
That works, as long as you end up moving in.
Can u get a conventional loan for a second home purchase while having an FHA loan or so you have to change the FHA to conventional?
Yep! You can have an FHA loan and then use conventional for a second home purchase
🙏🏽🙏🏽
You can get more than one fha loan?
th-cam.com/video/WSnAAJ2LKcg/w-d-xo.html