protechig wrote:CarefulBuilder14 wrote:What sort of price do you expect to pay for a home? If you can save a big chunk of your income, a big down payment will make it easier for a lender to overlook your bad history.
How big of a percentage are we talking? While i'm not against it, i'm looking to purchase a multifamily unit (for investment reasons) so the least I put down the better. Also FHA loans won't take that into account since there underwriting on strict guidelines set by the government.
I thought you wanted to buy a property where you'd be the owner-occupant. Getting a loan for an investment property will be even harder.
The specifics will depend on your market, but for a multifamily investment property with bad credit, I wouldn't be at all surprised if you had to put 40% down. Otherwise, the APR (on the slim chance you'll get a loan) will be awful and eat up your profits. Multifamily mortgages aren't usually subsidized and are less liquid than mortgages for owner-occupied properties.
I've done some work for a successful multifamily property investor. He has tended to put about 30% down and keeps rents low. It requires a big cash outlay at the start, but the properties are rented quickly to low-risk (not always no-hassle) tenants, and they are producing steady, positive cash flow (and accounting profits, too, actually) within weeks of purchase. I'm sure his credit report shows that he has successfully paid off millions of dollars in mortgages over the last few years, and even he isn't able to qualify for the super-low rates that owner-occupiers with 700-ish FICOs can get.
I wouldn't even be remotely considering this until you have paid off your debts and have a lot of cash on hand.