All Forum Posts by: Michael Brown

Wish I could proudly recommend mine, but I cant.

Looking for recommendations for General Contractor(s) who have worked with/understand the 203K renovation loan in Quincy, Massachusetts (just outside Boston).

Have a property under contract. Lots of work and money to be made.

True that. Thank you @Ann Bellamy

Sup BP Fam,

My fiance, and 2 buddies, just got a property under contract in Quincy, Massachusetts. (just outside South Boston, and Dorchester) It is a 6 bed 3 bath property. We will live in the 5 bed 2 bath unit and rent out the 1 bed 1 bath unit. This is all of ours first property (true house hack - FHA 203K loan). My question is regarding taxes. Since we all will be splitting everything 4 ways; the income, the expenses, everything, does it make sense to create an LLC to keep all the real estate income and expenses on one tax return? Or is it not worth it/should we just pro-rata everything between Schedule E and Schedule A on each of our individual tax returns? Any tax gurus/anyone that has experience with this sort of situation? Please advise.

@Pablo Bilbaolavieja 

#FirstPropertyUnderContract 

#Gettin'TheBallRollin'

@Stephanie P. So then it would require 2 refinances in the situation @Jim Blackburn mentioned? 

1) A refinance out of BPMI (a separate fee; the $423 amount in my scenario) at 10% equity and then another refinance 

2) Once we hit 20% equity to get a new loan with no PMI (BPMI or LPMI)??

A valid question for someone who knows the market/surrounding area: Is $575,000 for a SFH with 3 beds 2.5 baths, 2 off street parking spots, great condition, and roughly 1700 sq ft a DEAL??

@Patrick Hopkins– I agree with you on not banking on appreciation. It is BP code. I would love to find something that has better numbers NOW. With that said, this home is in a near perfect location. With companies like Amazon, Reebok, GE all coming to Boston and the growth of the surrounding areas, I’d like to believe the area is appreciating greatly. The 3 of us, me, my fiancé, and a friend would be buying the place together. We all work in Downtown Boston, and frequent a gym that is less than a 5 minute drive away (high priorities). We would also be renting out a bedroom (currently rented for $900) to another friend that would reduce the mortgage.

@Albert Bui – I appreciate the information. We were considering a 5% down loan with LPMI however the loan amount would have to be less than $424,000.

@Lesley Resnick – Yes. The plan is to house hack until we can refinance; move out; and rent it out. As far as the max loan amount, I mentioned in my post that we made it work so that we are just below the $598K – the max loan amount for an FHA loan in Suffolk County, MA on a SFH.

@Josh C. – Awesome. I did not know that. So we would refinance into a conventional loan with LPMI in a year?...and then once we hit 20% equity the conventional LPMI would just drop off, without the need for an additional refinance?

My buddy said the following: "Your real play would be banking on appreciation. Obviously most markets you don't want to count on that but in South Boston with the growth of the Seaport and South Bay, and the sizeable gap between the price per sq ft in the South End and Southie there doesn't seem to be an end in sight. You could probably cash out the equity in a year or two and get rid of any extra PMI payment. It is gambling in some sense but I really don't see Southie going down anytime and only becoming more desirable as G.E, Reebok, Amazon move to the Seaport and as Andrew Square and South Bay get developed." @Ricky Beliveau thoughts? 

@Blair F. I think that is the conclusion I am coming to as well. I need someone from MA (that understands the South Boston/Dorchester area) to chime in.

@Zack Karp Thanks. and Yikes. So this would have to appraise for a hell of a lot more before it made sense to refinance. 

Zack Karp Thank you. So the max conventional loan I could get if it appraised at 675K is 80% or 540K. So obviously after a year of house hacking based on my numbers above I would owe more than that (the 540K) on the home. The difference between what I owe above the 540K, would be another down payment I would have to make in order to refinance?