Nothing with outstanding cash flow potential, but decent enough places to get a base started. Then again im not looking for massive income potential on these two at this moment. Obviously the situation isnt ideal now being rushed but its the difference between $30k+ on TWO properties so im not going to complain too much. If I like how the real estate world works after these two, ill move on to bigger and better things but for now I cant ask for much more.
How many properties do you have? When i purchase my dads it will be my first property but i feel like id like to keep buying more eventually so i can make money. What are your thoughts?
Im sure every single person who has commented in this thread can elaborate on the benefits of owning property in Buffalo. Access to funds is historically what what keeps people out of the game but with interest rates as low as they are now, and with FHA, Freddie and Fannie requiring such low down payments, its easier than ever to buy property. Couple that with a super afforable/stable market in WNY, a 51% renting population and federal/state/local/lending instituation incentives, youd be crazy to not be buying right now, even if just for a personal home. When im done with these two, ill most likely be buying my parents house as well as an owner hold. Id like that to be my first “home.”
Not sure if its been said but this house is sold BTW. I guess they had dozens of offers in the first few days.
i’d just like to say it sounds like you are playing with fire here…multiple properties, multiple borrowers, no intent to live in the properties…mortgage fraud isn’t something you want to get mixed up in these days. they don’t usually drag people into court, they just call the loan in. good luck getting a conventional refinance when you only have 3% into the property and it is not your primary residence.
Theres nothing fraudulent about situations changing (marriage) and not to say it doesnt happen, but I havent heard of a single instance where FHA checks up on people to make sure theyre still residing in their places. Regardless, I personally know of two people who had FHA loans that ended up married and keeping both properties. Perhaps being completely removed from both places is a little risky but im guessing ill be fine. In the end, when my mortgage officer is telling me ill be ok, im gonna assume itl be fine.
Quote for potential future hilarity if youd like lol
well i’m just telling you that they do in fact do spot checks and they seriously pursue this stuff if they think someone is conspiring to defraud them.
the people who owned a place my wife worked for early on in her career got mixed up in very shady mortgage deals. somewhere in the confiscated files her name popped up. a few lovely unannounced home visits from the secret service (black cars, black suites, black sunglasses) later they determined she had no role or knowledge of the schemes and didn’t even work there at the time when most of them were hatched.
suffice it to say the knew an awful lot about us and our own investments and made that point very clear. i’m just saying after being that close to one of these investigations you should always ask yourself if you think what you are doing would be viewed favorably. the affidavit of occupancy that you sign as part of an FHA loan attests to the fact that you intend to permanently live in the property. it seems pretty clear that is not the case.
i’m not accusing you of anything, just giving you some advice to take caution.
I appreciate it, and believe me, despite my Guvment cheese comment im not trying to scam the system by any means. If changes need to be made to comply with requirements ill make them. Just the way I see it is WE are in the position to legally aquire two places and im gonna hop on that and if I just so happen to have a major life event alter my situation, ill deal with when FHA asks me to deal with it.
I saw this a while ago and just dug it up. FHA’s guideline to define satisfaction of the owner occupancy requirement"
So shell be shacking up with her friend that she rents to for the next year.
It’s not like the FHA police stop by every week to verify you live there…
I would imagine the only way u could get really screwed is if the IRS came after
Yea, and on the outside alone, it needs about 20K in work. I passed on it, althought I LOVE the street and area…
no, but they do spot checks when strange stuff starts happening. for example, suddenly the address to which the monthly invoices for 2 separate FHA loans is changed to be a third residence in which both borrowers now reside. i’m just saying that it does happen and they do keep a closer eye on these things than you might imagine.
that FHA loan number that is associated with the property is very closely watched. it is all too often the case with an FHA loan on a property where the loan to value ratio is suspect that a broker or agent will try to get an appraisal done without the FHA number being associated with the appraisal. if the appraisal ends up being favorable they will slap the number on it, if not, they get another appraisal done by someone else and hope for better results. usually the broker or agent will claim they don’t have the number yet, or they are forwarding it later…this is all BS…they have the number but they just don’t want an unfavorable appraisal associated with the deal because once that FHA number goes out to the appraiser they are stuck with that appraisal regardless of the results. FHA seriously pursues those who take part in this scam.
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the IRS doesn’t give two hoots about what you are doing with your mortgages. the favorable terms of an FHA loan don’t impact your tax bill in any significant way or create any kind of tax fraud. you have to worry about the secret service who is the one interested in federal mortgage fraud. but before they would ever get involved, you would have to worry about your bank or FHA calling in the loan. they aren’t looking to put most people in jail, they just want their money back and to get the risk off of their books.
is there a centralized FHA database?
I thought once you close on a house the mortgage is now owned by whatever bank.
If you used seperate banks how would they ever be aware of this?
Just curious
i was thinking more along the lines of an audit
an FHA appraisal gets uploaded through an FHA portal…i believe all the other associated documents for underwriting are as well. so the loan origination process is closely tracked by FHA.
you are right beyond that, that the bank is responsible for keeping track of their own loans. FHA is providing insurance, but that insurance comes with guidelines that the banks must adhere to- including the owner occupancy requirement of 1 year minimum. so if MOBOOST4U wants to better his chances of not getting any interest from the bank he and his girlfriend should probably use 2 different banks to reduce the likelihood of anyone connecting the dots and asking questions.
Interesting thanks for the info
Yeah, all good stuff man, appreciate the helpful insight rather than asserting what you think is going to happen. What do you do if you dont mind me asking lol?
You gotta remember too though, in the FHA guidelines they use the words “in bad faith” a lot while discussing actions defined as fraudulent. Like you mentioned this would be much worse if I appeared to be clearly trying circumvent the rules but through some research, I hear theyre pretty open to written explanations as to why circumstances have changed for their borrowers. There will at least be periods of time where we do occupy them as intended.
That house is right next to a house that I own. I wanted it in the worst way just for the ease of rent in the area and for simplicity on my end having multiple houses on one street.
I made an 85k CASH offer and was shot down hard. I think it went for 115-120. This place needed a terrible amount of work inside and out. In all honesty I don’t see myself buying much more if anything in North Buffalo for awhile. Due to other investments that are doing great and far more liquid and poor cashflow due to crazy prices the last few years I am shifting gears. Wish I jumped into the west side a few years back as I know some people killing it over there in the up and coming areas. But I am weary of real estate that will take up too much of my time as it isn’t my primary means of income and last thing I want is all my days off to be dealing with it.
That said even though it hurts me as an investor I am glad to see so many people making good long term financial choices and investing in Buffalo.
If that’s genuine, it’s certainly a noble thing to say. If only we could all be as fortunate to get into the game as early as you did, I’d hope many people would share those feelings too. Buffalo is not a huge town so I love to see when people from limited communities share support for each other rather than go at each other’s throats (cough cough nyspeed). I know for one I want to hate you out of jealousy for what you appeared to have built up but I have so much respect for it. Sounds like you cornered the market abs raped the shit out of it.
Its genuine but only cause im not really shopping at the moment. Once I am DIAF and get out my hood 
…jk.
PS you give me too much credit. I really don’t have that much property. I wish! 4-units or larger and commercial are when you start making real money. I have neither 
This is what we’re going to be concentrating on for next decade or so. Just waiting for the FHA appraisal to come back on this one, and we should be good to go. Might have a bit more negotiating room once that comes in. We’ll see.
Going to likely start looking for the next in about 2 years.