50% Investor Ratio In Condo Development - Killing Financing Options
i found a great condo near a university with very good leases in place. approx $140k with approx $1400/month rent. i can probably bump that up $200/month next year.
i posted in another thread about trying to keep to a 1% monthly rent to purchase price ratio. i seem to recall reading that somewhere, and according to my spreadsheet, i like the numbers its spitting out.
my problem is that more then 50% of the units are investor owned. when i went to my favorite local broker, he said that anything over 50% limits lenders - fannie mae guidelines preclude anything greater the 50%.
does anyone have experience dealing with this? any specific programs or lenders you could point me to?
If the association states over 50% non owner occupants you will need to get commercial financing.
Laurie
[addsig]
well as it turns out, my mortgage broker was able to swing something pretty damn good. he was able to get us a conforming rate, because of our (my brother and i are buying together) high-ish credit scores ~750, and our solid reserves. so we got a 75% 1st at 5.875 and we are putting 25% cash down. after it closes, we will go get a HELOC for another 15% or so.
im still shopping the HELOC.
i also decided to do some research on an umbrella policy. our first choice was to work with USAA, since that is who we use for our autos, and the service and prices are excellent. because we live in the boonies, USAA is not competitive on home insurance. so we use farm bureau. i called and verified that we have $1M in personal liability, and that he can just add the rental property onto our home policy. $30 later, the condo is now (will be) covered as well. nice!
im done after this third rental - at least for awhile. ive got a development project cooking in the bay area in CA, and i need to see if im going to be a hero or in the poor house after they finish getting built ~9 months.