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  • January 24, 2010 at 3:35 PM #16942
    Werewolf
    Participant

    Hi all

    I think I’ve an investment property 2/2 condo I would like to make an offer on.

    I am a 1st time buyer and don’t think a FHA offer will win the property so I am thinking a 80/20 offer with no buying broker involved. Thoughts as whether this is still competitive or a bad idea?

    Also how does getting an investment property 1st affect my mortgage candidacy later (like a 1/2 yrs from now) for a home that I would actually like to live in?

    Thanks!

    January 24, 2010 at 4:29 PM #505116
    Ren
    Participant

    [quote=Werewolf]
    Also how does getting an investment property 1st affect my mortgage candidacy later (like a 1/2 yrs from now) for a home that I would actually like to live in?
    [/quote]

    Ideally it won’t affect you much, and could even help you, if you had REALLY good positive cash flow. The lender will count a portion of the rent as income (maybe 75%). You want as much of the first property’s payment covered by that as possible, because anything else is just added to your list of liabilities and hurts you when qualifying for the second property.

    That assumes you’re going to rent out the first property from the start. If you’re going to live in it, that’s way more difficult to pull off. You’d have to qualify for both payments in order to get the second property – potential rental income doesn’t count.

    January 24, 2010 at 4:29 PM #505669
    Ren
    Participant

    [quote=Werewolf]
    Also how does getting an investment property 1st affect my mortgage candidacy later (like a 1/2 yrs from now) for a home that I would actually like to live in?
    [/quote]

    Ideally it won’t affect you much, and could even help you, if you had REALLY good positive cash flow. The lender will count a portion of the rent as income (maybe 75%). You want as much of the first property’s payment covered by that as possible, because anything else is just added to your list of liabilities and hurts you when qualifying for the second property.

    That assumes you’re going to rent out the first property from the start. If you’re going to live in it, that’s way more difficult to pull off. You’d have to qualify for both payments in order to get the second property – potential rental income doesn’t count.

    January 24, 2010 at 4:29 PM #505763
    Ren
    Participant

    [quote=Werewolf]
    Also how does getting an investment property 1st affect my mortgage candidacy later (like a 1/2 yrs from now) for a home that I would actually like to live in?
    [/quote]

    Ideally it won’t affect you much, and could even help you, if you had REALLY good positive cash flow. The lender will count a portion of the rent as income (maybe 75%). You want as much of the first property’s payment covered by that as possible, because anything else is just added to your list of liabilities and hurts you when qualifying for the second property.

    That assumes you’re going to rent out the first property from the start. If you’re going to live in it, that’s way more difficult to pull off. You’d have to qualify for both payments in order to get the second property – potential rental income doesn’t count.

    January 24, 2010 at 4:29 PM #506015
    Ren
    Participant

    [quote=Werewolf]
    Also how does getting an investment property 1st affect my mortgage candidacy later (like a 1/2 yrs from now) for a home that I would actually like to live in?
    [/quote]

    Ideally it won’t affect you much, and could even help you, if you had REALLY good positive cash flow. The lender will count a portion of the rent as income (maybe 75%). You want as much of the first property’s payment covered by that as possible, because anything else is just added to your list of liabilities and hurts you when qualifying for the second property.

    That assumes you’re going to rent out the first property from the start. If you’re going to live in it, that’s way more difficult to pull off. You’d have to qualify for both payments in order to get the second property – potential rental income doesn’t count.

    January 24, 2010 at 4:29 PM #505263
    Ren
    Participant

    [quote=Werewolf]
    Also how does getting an investment property 1st affect my mortgage candidacy later (like a 1/2 yrs from now) for a home that I would actually like to live in?
    [/quote]

    Ideally it won’t affect you much, and could even help you, if you had REALLY good positive cash flow. The lender will count a portion of the rent as income (maybe 75%). You want as much of the first property’s payment covered by that as possible, because anything else is just added to your list of liabilities and hurts you when qualifying for the second property.

    That assumes you’re going to rent out the first property from the start. If you’re going to live in it, that’s way more difficult to pull off. You’d have to qualify for both payments in order to get the second property – potential rental income doesn’t count.

    January 24, 2010 at 4:58 PM #506025
    EconProf
    Participant

    I really don’t see your reasoning for this condo purchase.
    Rental condos make little if any cash flow as investments even at their now deeply discounted values. Besides, if you are going to buy, only 6 months from now, a dwelling to occupy yourself, the lender is going to look at your liquidity and your cash flow. He will make conservative assumptions about your new condo investment–high expenses, low rent (big vacancy factor). And you’ve just drained your liquidity to buy the condo so you look less safe.
    I don’t get it…maybe you need to give us more info

    January 24, 2010 at 4:58 PM #505679
    EconProf
    Participant

    I really don’t see your reasoning for this condo purchase.
    Rental condos make little if any cash flow as investments even at their now deeply discounted values. Besides, if you are going to buy, only 6 months from now, a dwelling to occupy yourself, the lender is going to look at your liquidity and your cash flow. He will make conservative assumptions about your new condo investment–high expenses, low rent (big vacancy factor). And you’ve just drained your liquidity to buy the condo so you look less safe.
    I don’t get it…maybe you need to give us more info

    January 24, 2010 at 4:58 PM #505773
    EconProf
    Participant

    I really don’t see your reasoning for this condo purchase.
    Rental condos make little if any cash flow as investments even at their now deeply discounted values. Besides, if you are going to buy, only 6 months from now, a dwelling to occupy yourself, the lender is going to look at your liquidity and your cash flow. He will make conservative assumptions about your new condo investment–high expenses, low rent (big vacancy factor). And you’ve just drained your liquidity to buy the condo so you look less safe.
    I don’t get it…maybe you need to give us more info

    January 24, 2010 at 4:58 PM #505273
    EconProf
    Participant

    I really don’t see your reasoning for this condo purchase.
    Rental condos make little if any cash flow as investments even at their now deeply discounted values. Besides, if you are going to buy, only 6 months from now, a dwelling to occupy yourself, the lender is going to look at your liquidity and your cash flow. He will make conservative assumptions about your new condo investment–high expenses, low rent (big vacancy factor). And you’ve just drained your liquidity to buy the condo so you look less safe.
    I don’t get it…maybe you need to give us more info

    January 24, 2010 at 4:58 PM #505125
    EconProf
    Participant

    I really don’t see your reasoning for this condo purchase.
    Rental condos make little if any cash flow as investments even at their now deeply discounted values. Besides, if you are going to buy, only 6 months from now, a dwelling to occupy yourself, the lender is going to look at your liquidity and your cash flow. He will make conservative assumptions about your new condo investment–high expenses, low rent (big vacancy factor). And you’ve just drained your liquidity to buy the condo so you look less safe.
    I don’t get it…maybe you need to give us more info

    January 24, 2010 at 4:59 PM #505278
    patb
    Participant

    well Sane lending would look at a rental and say

    “if you can show 125% Debt service coverage ratio
    then anything above that is income to you, particularly if you have a tenant with good credit and a 2 Year mortgage.”

    the other is Net after Debt,

    January 24, 2010 at 4:59 PM #506030
    patb
    Participant

    well Sane lending would look at a rental and say

    “if you can show 125% Debt service coverage ratio
    then anything above that is income to you, particularly if you have a tenant with good credit and a 2 Year mortgage.”

    the other is Net after Debt,

    January 24, 2010 at 4:59 PM #505778
    patb
    Participant

    well Sane lending would look at a rental and say

    “if you can show 125% Debt service coverage ratio
    then anything above that is income to you, particularly if you have a tenant with good credit and a 2 Year mortgage.”

    the other is Net after Debt,

    January 24, 2010 at 4:59 PM #505130
    patb
    Participant

    well Sane lending would look at a rental and say

    “if you can show 125% Debt service coverage ratio
    then anything above that is income to you, particularly if you have a tenant with good credit and a 2 Year mortgage.”

    the other is Net after Debt,

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