3 ms·
> A property that has four or fewer apartments is treated the same as a single family home for lending purposes. But five or more units requires a commercial lo
by phnofive 5y ago
> A property that has four or fewer apartments is treated the same as a single family home for lending purposes. But five or more units requires a commercial loan. So we created a pro forma and told the bank we were investors looking to be slumlords and this building would cash flow.
This is not a difference of perspective - home loans involve significantly more consumer protections than commercial ones; had things gone another way, the author'd be paying substantially more in rent to whatever landlord purchased the foreclosed five-plex.
Most of the article sweeps risk under the rug as do most stories where the winner is also a lucky survivor.
- kareemm 5y agoWhat issues would they have had other than not paying $900/m that would have caused the bank to foreclose? Even a decade ago $900/m wasn’t a lot of money for rent in a major urban metro.
- bradlys 5y agoSplit between two people as well. Only $450/month. It was really not very much money at all. Their partner apparently isn’t a house cleaner and supposedly makes a decent living.
- skybrian 5y agoOne risk might be some kind of legal dispute with the other partners, if they don't get along as expected? Or maybe some devastating expense.