mortgage for 4-unit owner-occupied property - Posted by Marc Lamphier

Posted by henry on December 13, 1998 at 08:10:39:

There are several realtors and mortgage brokers who have found 0 down on owner occupied,up to 4 units, only minimal closing costs, maybe the seller will even split the costs or even pay the costs? So yopu probably want to check these brokers out they have access to many programs, but dopn’t stop a t one shop around for different brokers
Merry Christmas to you and yours

mortgage for 4-unit owner-occupied property - Posted by Marc Lamphier

Posted by Marc Lamphier on December 12, 1998 at 10:42:07:

I am a prospective first-time buyer. My landlord wants to sell the 4-unit apartment house I am currently renting, and I am interested in buying. Appox. 180K price, rents are about $550 - $600 per unit/mo. I expect a positive cash flow after mortgage payments, taxes, insurance, maintenance, plus I will no longer be paying rent, so it seems like a good deal. I’ve lived in the building for 8 mos. so I know it inside-and-out, and the landlord is a personal friend in addition. He will become my tenant and I’m sweetening the deal by offering him free office space in an unused part of the basement. I think having the previous owner around will help if I have any problems with repairs etc. He wants to cash out and leverage up to a bigger building.

I have just started approaching lending institutions for mortgages. I am curious about what terms I might expect. I had originally thought I would qualify for a mortgage similar to a single-family owner-occupied home. I was looking for something like 10% down and 7% interest. Are the rates and terms for a multi-unit owner-occupied home very different? I don’t want to go up to 20% down if possible. Am I being unrealistic? I also understand that for tax purposes owner-occupied up to 4 units still qualifies for an interest deduction. Is this correct?


Re: mortgage for 4-unit owner-occupied property - Posted by Dave T

Posted by Dave T on December 12, 1998 at 20:04:02:

You do qualify for residential, owner-occupied loan rates – currently about 6.5% on a 30-yr fixed for 80% financing. You can still get the 80% loan and only pt 10% down, if the seller will carry back 10%.

As to your question concerning interest deduction. The current tax rules specify that the portion of the mortgage intestest that is attributable to your personal residence is deducted on your schedule A. The balance of the mortgage interest is attributed to your investment rentals. and is deducted on Schedule E.

See your tax professional for specific details.

Go FHA for 4 unit - Posted by BankRobber

Posted by BankRobber on December 12, 1998 at 13:07:06:

On a $180K 4 unit you will only have to put down approx. $13K for owner occupied FHA financing. The 30 year fixed mtg. at approx. 6.75% would be a good choose, but I would prefer the ARM which is indexed at 2% over the 1 Year T-Bill rate.

Re: mortgage for 4-unit owner-occupied property - Posted by Marc Lamphier

Posted by Marc Lamphier on December 14, 1998 at 14:33:47:

Thanks for the comments. I don’t think the seller would go for providing the 10%, since he is doing this to cash out. Is there anything special about getting the seller to loan you the 10% versus simply borrowing the same amount of money elsewhere, e.g. from a relative. I figure that if I expect the % return to be greater than the % interest I must pay to borrow the money it is worth it to borrow. So, e.g. my father might lend me the money @ 7% or something.