I want to own investment property. Where do you all suggest? (Pittsburgh: construction loan, house)

[painkillers]

Originally Posted by jea6321

Im assuming you are going FHA? if so you can do up to 4 units. You can no longer do owner occupied 5-10% down conventional loans. Its fha or 20% conventional. 3 and 4 units typically will be better from strictly a financial point of view, but they are also more work and can possibly have more potential problems. ( economies of scale work in both good and bad ways)

FHA loan limits are a little over 400k, so it opens up a good bit of options. If its currently rented, you can use the income from the units you do not plan to live in to help qualify for more loan.

really you need to know what your ultimate goal is going to be. Do you want maximum cashflow potential? max appreciation potential? what types of tenants are you looking to target? how handy are you? do you own most basic tools? do you own a vehicle that can transport materials?

for neighborhood, just buy where you yourself would like to live. I always use that as a starting point with people that want to do a live in multiunit. drive/walk around the area, and while looking at the building keep asking yourself "would I as a renter want to rent this place?" chances are if you say no, so will most potential tenants that you show it to. Also keep in mind the demographics of the area. If you want to target young professionals, you will want to buy in an area that those people want to live.

As for flipping, there is a ton of competition right now. Lots of contractors and investment partnerships that have systems in place and fairly deep pockets. Id highly suggest not going down this route unless you are confident in the project. Most people break even or lose money on their first flip because they dont plan properly or way underestimate the cost to rehab. 40-60k can be eaten up way quicker than you may think. thats actually a very small budget unless its a very basic reno.

Where are you getting this information that you cannot do 5-10% conventional? My roommate who purchase the house we live in the Flats got his $280k home with a 10% down conventional in July 2016.

[jea6321]

Originally Posted by painkillers

Where are you getting this information that you cannot do 5-10% conventional? My roommate who purchase the house we live in the Flats got his $280k home with a 10% down conventional in July 2016.

is it a multi unit or single family. single family still allows 5% conventional and some are now even doing 3% conventional.

its been 2 years now since conventional lending guidelines allowed less than 20% down on multi family. You could do FHA and put more down to get to 10% but are only required to put 3.5% with FHA

[painkillers]

Originally Posted by jea6321

is it a multi unit or single family. single family still allows 5% conventional and some are now even doing 3% conventional.

its been 2 years now since conventional lending guidelines allowed less than 20% down on multi family. You could do FHA and put more down to get to 10% but are only required to put 3.5% with FHA

I see, it's a SFR. Here are the guidelines I think you're referring to for anyone else who may come across this: Mod cut: link removed, please read our tos
Now, if talking to a portfolio lender who holds mortgages on their books, have you seen them go 90-95% LTV since they're not selling the loan off?

[jea6321]

Originally Posted by painkillers

I see, it's a SFR. Here are the guidelines I think you're referring to for anyone else who may come across this:Moderator cut: link removed, please read our tos


Now, if talking to a portfolio lender who holds mortgages on their books, have you seen them go 90-95% LTV since they're not selling the loan off?

I dont know any lenders that will do so. You may find someone to do it, but Id be willing to bet the interest rate will be through the roof compared to a conforming loan.

[selltheburgh]

Correct - a multi-unit needs to be 20% down.

2-4 units are commercial if purchased by an LLC and not a FNMA backed loan.

You can do 3.5% down on an FHA purchase, but the property has to be in good shape and can't have an old roof, chipping paint, etc.

[jea6321]

Originally Posted by selltheburgh

Correct - a multi-unit needs to be 20% down.

2-4 units are commercial if purchased by an LLC and not a FNMA backed loan.

You can do 3.5% down on an FHA purchase, but the property has to be in good shape and can't have an old roof, chipping paint, etc.

Interesting, Ive never heard of a roof becoming an issue for FHA. Chipping paint, no handrails on 3+ stairs and non fire rated doors between the garage and house are the three that always seem to show up for me.

[UKyank]

You can get a non FHA loan for 3% down in certain zip codes here through a bank program assisting developing neighborhoods here.

All that being said I think your excess cash is too low to think about doing what you want to get into.

[safak]

Originally Posted by jea6321

Interesting, Ive never heard of a roof becoming an issue for FHA. Chipping paint, no handrails on 3+ stairs and non fire rated doors between the garage and house are the three that always seem to show up for me.

ive once seen them demand the roof a shed replaced.

[selltheburgh]

Originally Posted by jea6321

Interesting, Ive never heard of a roof becoming an issue for FHA. Chipping paint, no handrails on 3+ stairs and non fire rated doors between the garage and house are the three that always seem to show up for me.

If the roof is almost failing, they'll flag it...even if the roof isn't leaking. It is rare, but most multi-units that are for sale aren't in the best condition.

[sky329]

I have a beautiful duplex in Mt Washington coming on the market in 2 weeks...

But besides that flipping is definitely possible in this area... find a house where u wouldn't mind living.. preferably south side greenfield mt wash Lawrenceville Brookline or dormont... find one that's just beat up.. not a complete rehab, old bathrooms 70s kitchens old flooring and a house that maybe could have a wall removed... the thing is people don't usually have the cash to fix these properties so they rather finance it into a mortgage... tons of old houses in the area waiting to be flipped... idk what these guys r talking about...

https://www.redfin.com/PA/Pittsburgh...obile_app=true

Beautiful lil ranch perfect for professional... that's a. Easy rehab knock a wall down and update some bath and kitchen then boom 90-100k easy...

https://www.redfin.com/PA/Pittsburgh...obile_app=true

Here's a nice lil duplex that needs work.. this could be a flip... just update everything and paint the outside of it or maybe do siding.. I'm sure I will get some negative replies but I know my stuff and I come with facts have a good day and good luck looking