Delayed Financing Exception

[Lauren C.]

Hello to all,

I'm looking into Fannie Mae delayed financing since I have the cash reserves to purchase and rehab, but it would be my first property, and it's a little confusing as to the mortgage qualification. I see that the rehab needs to be specified on the closing disclosure (which I believe was called HUD-1). I'm particularly interested in corporate housing (especially nurses/therapists since I am one and could possibly use that to network with the companies placing the medical professionals). Let's say I get someone someone signed for a 3-month lease, which of course is a much higher rent than typical long-term prices. How does the lender look at this income? Because I have mortgage debt I pay monthly, plus maintenance (primary residence is a co-op), but I have no consumer debt. Husband has a W2 job, and I'm going to be doing REI full-time since we have more than enough cash from an inheritance (and I'm super burned out from being in that field). Income will be cut in half, as far as the bank is concerned, though.

I apologize if I'm looking at this all wrong or something. I listened to BP podcast #406; the guest used delayed financing to pull out all her cash by listing the rehab on the HUD-1, and then she used it for AirBNB. She called it a BRRRnB.This is a similar thing, only 90 day stays (and typically very responsible tenets).

I'd like to purchase a condo in a location that frequently hosts these professionals. Single family homes don't seem like a good idea: usually, these are youngish people who live alone and prefer amenities like a gym in the building. Housing stipends are generous. I could easily charge 2,000+ for a 1 bed/bath in many places. HOA fees though, I know.

I remember hearing Brandon say something like "that's interesting, I never used delayed financing in any of the deals I've done" to the guest, so that in itself made me wary. But I know people do this.  

Also, I know that nicer buildings in downtown areas probably don't need much by way of renovation...but if I'm able to purchase for less than the whatever it appraises later on, I'd still only have a small amount of cash left in the deal (yes, I know that's not a good thing, generally).

Sorry to be long-winded. Anyone do this sort of thing??