[HLS]

[quote=FlyerInHi][quote=HLS]
If you’re open to the idea, look at other parts of the country where $800,000 will buy you an apartment building (10-20 units or more) that can gross $8,000 a month rent (or more)
…..After expenses and management fees you could have a nice return and greater depreciation than an OC townhome.
There are good property managers out there and you wont be involved in the repairs/maint other than making decisions.[/quote]

I agree. But do you think he can quality for loan? Usually 7 years adjustable with balloon payment.[/quote]

Qualifying for commercial property is different than 4 units or less. Many different programs. OP has strong income & good credit. There will always be money available at some rate.

The income from the property carries more weight in qualifying.
It’s also possible to buy units with partners etc.
Many variables, just general advice.

Conventional loans with 30yr fixed rates are available on 1-4 unit properties. Although not common around here, there are many areas that have 2- 4 unit buildings that can be financed separately.

Not a concept for those who want to be hands on landlord.

[HLS]

You will ALWAYS find tenants willing to rent a new townhome in that area; however whether you want to rent to them OR the amount that you can get will vary. There is always a risk of a problem/deadbeat tenant.

You can’t rent anything new for anywhere near $1500 in that area,
There are always people who have no interest in buying (for various reasons) and will pay a top price to rent a nice place.

I don’t think it makes and sense to consider buying an $825K place that would only rent for $3000 mo.
How much is the HOA that you will pay ?
Don’t forget that your property taxes will be $800+ a month.
You will need cash out of pocket every month, in which case your tenant is not paying down your mortgage (you are)

If you’re open to the idea, look at other parts of the country where $800,000 will buy you an apartment building (10-20 units or more) that can gross $8,000 a month rent (or more)
…..After expenses and management fees you could have a nice return and greater depreciation than an OC townhome.
There are good property managers out there and you wont be involved in the repairs/maint other than making decisions.

[HLS]

Do you still need info on qualifying & loan pricing ?
Competitive pricing, usually 24-48 hour underwriting.

[HLS]

Articles like this are just silly and partially ignorant.
The authors are usually clueless about what it takes to qualify for a mortgage. It’s general info.

A huge factor that varies is the monthly debt payments that show on a credit report before even thinking about buying a house.
Car payments, credit card payments, student loan payments, etc.

Many people with an 800 credit score and 50% down can get turned down for a mortgage for various reasons.

It is possible to buy a $743,000 house with 20% down on $120K annual income. It’s about 37% of gross income.

It’s also possible to get approved to borrow more than one should be comfortable borrowing.

[HLS]

Your friend may not understand exactly what’s involved.

Based on your scenario,
You are going to tie up $165,000+
and need a jumbo loan with a monthly obligation of over $4200 PLUS HOA .
How much can you rent it for ?

Based on loan pricing, it makes much more sense to put 25% down on an investment property. I don’t think it makes sense to consider this property as a rental.

Also, many stocks are nowhere near “all time peaks”
(The manipulated indexes are at peaks)
Plenty of ways to make money if you think the indexes are going to fall. Plenty of stocks may be cheap today.

You should seek out some competent rational advice with a focus on something other than what the masses are doing.

[HLS]

Loan qualifying is based on total monthly minimum payments on a credit report + housing expense. Front end ratio doesn’t matter.

$63,400 annual gross income = $5283 mo.
43% is pushing the ratio for most ppl = $2272 TOTAL monthly payments.

Assuming NO car payments, student loans or credit card minimum payments & a 4.00% rate with a 20% down payment:

$450K purchase price & $360K loan
1757 Payment
450 taxes
75 Insurance
———–
$2282

If there is HOA or Mello Roos, car payment or other monthly debt the loan payment will need to be less to qualify.

It might be possible to go to a higher ratio, as approvals can vary based on multiple factors.

[HLS]

Lawyers don’t write deeds.

Depending on current vesting, partner A may need to agree to partner B selling their interest. Will they ??

I have been involved with a few partners and all of them worked out well.
It is CRUCIAL that everyone involved understands vesting options and the consequences.
LINK:
http://www.firstam.com/assets/homebuilder/homebuyer/vesting-ways-to-take-title.pdf

**Based on your info, they would probably want TENANCY IN COMMON.
If partners are 50/50 there should be a clear understanding up front of how any disagreements will be settled;
otherwise the majority owner’s decisions are final.

There are possible consequences to any decisions & investments.
I know plenty of people who were so cautious and conservative throughout life and always focused on what could go wrong and never took any risks in life. Afraid of their own shadow.
Most of them have very little net worth today and their only income is around $1000 a month social ‘security’

[HLS]

Extrapolate ?
Sure.. take the midpoint of the 10YR & 20YR 😉

[HLS]

If you signed an agreement, read the terms.

If you did not sign an agreement you are under no obligation to continue a relationship with her and you aren’t obligated to send her written notice nor give her any explanation unless you want to.

It could only get sticky if you have already OR wanted to make an offer with a different agent on a house that she has already showed you.

PS: I am a Realtor.

[HLS]

Freedom of speech allows him to say whatever he wants.
However, the slightest hint of discrimination when
it comes to renting/selling property could cost him everything that he owns.

I know he’s an expert in almost everything and would never pay anyone to do anything, so hearing what the judge would say about his
racism would be interesting (especially if it were a ‘Black’ or ‘Latino’ judge) when he represents himself.

[HLS]

Discussing tenants by using terms such as
White, Black and Latino is a blatant violation of Federal Law
and if anybody ever heard you utter them, you could get sued and lose everything that you own. Good luck defending yourself.

Now that you are on the board of the HOA, your racism & prejudicial remarks could bring down the entire association.
I hope they have really good insurance.

On March 28, 2014, the U.S. Department of Justice published a notice increasing the civil monetary penalties for violations of the Fair Housing Act. Under the new rule, which applies to violations that occur on or after April 28, 2014, the maximum civil penalty for a first violation has increased from $55,000 to $75,000, and for subsequent violations the new maximum is $150,000.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws

[HLS]

Sorry for your loss.
Creating a trust could have been done in one day.

Probate is a legal process, boilerplate.
I’m not sure if there’s such thing as a bad probate attorney.

You can shop around but I think their fees are set by the state,
It isn’t cheap (and a lot more than what a trust would have cost)
and it can take 6 months to a year to settle.

http://www.ca-trusts.com/probate.html

https://www.nolo.com/legal-encyclopedia/california-probate-an-overview.html

[HLS]

I don’t think that you will be able to purchase with a 1st & a HELOC but HELOC guidelines are up to each institution as they are lending their money with their rules. (You might)

HELOCS are usually always at an adjustable rate, tied to Prime and are no rate risk to the issuer, If prime goes up, so does your rate,

1st mortgages are underwritten with guidelines from FNMA, FHLMC, FHA or VA. Having 2nd may affect your 1st pricing

You CAN purchase with a 1st + a 2nd Home Equity LOAN.
These are typically fixed rate probably 6%+ today.
No prepay penalty.
*This option guarantees that you will be able to accomplish what you want to.

After purchasing, (you may need to wait 6 months) you could get
a HELOC (at adjustable rate) to pay off the 2nd Loan.

Another option, a bit more risky is purchasing with just a 1st mortgage now and attempting to have your mortgage payment ‘recast’ at the same rate & the same term when you make your principal reduction payment. You will get the lowest rate.

I work with lenders who will recast a payment on loans that they service if the principal reduction is in excess of $10,000.
**The risk lies is not knowing who will be servicing your loan at the time you are ready to make your principal reduction.

I made several inquiries today and they all said the same thing.
They will not originate a loan with an explicit guarantee that any future servicer must honor their recast policy.

Depending on what % of equity you will have, I could possibly structure a creative scenario that would guarantee you could do this.

SO…..
Assuming that you qualify, you do have options to accomplish your goal.

[HLS]

“I want to do a 1031, but I can’t really afford to buy another 350k property (since a 1031 requires the replacement property to be at the same or greater value?)”

You should only need to incur the same amount of debt that you have, not the same or greater purchase price.
I have also heard of partial 1031’s when not all debt could be
carried.
You can also buy more than one property if necessary to accomplish this. It’s a wonderful option for many people.

******You really should talk to a qualified tax adviser that you have recourse with about this rather than getting information from a blog.

I’m curious if your current property is a condo OR house ?

http://www.forbes.com/sites/robertwood/2014/03/10/7-key-rules-about-1031-exchanges-before-theyre-repealed/#40ee5ace3d07

[HLS]

Realistically it’s more difficult to identify personal property in a trust;
jewelry, collectibles, gold. silver, china, collectibles, stamps, coins etc as they often tend to mysteriously disappear after someone’s death.

Legally titled assets, real property, vehicles & bank accounts are the important titled assets that should go into the trust.

I think that most trusts these days include a provision for a
‘pour over will’ meaning anything not explicitly mentioned automatically goes into the trust upon death but the more heirs there are the more disagreement there is likely to be
(i.e. Grandma said *I* could have her bicycle when she died)

A trust doesn’t need a bicycle or a washing machine or a ping pong table, etc

[Author]

Posts