All Forum Posts by: Andrew Postell

@Steve Rozenberg from a lending perspective depreciation is one of the line items that a conventional loan can give back to you in the form of income.  For example, if you net $0 on a property (after all your deductions) but your have depreciation of $1000 then a conventional loan will count that property of netting you $1000.  If you have depreciation listed on your tax returns then it will help with getting you qualified for a conventional loan.

@Laurie Chimento a local bank would be the best method for finding a portfolio loan.  Also a mortgage broker would be a helpful person to know as well.  A mortgage broker is someone that represents many different banks so they might know a portfolio lender for you.

@Laurie Chimento what you are describing is a common area for many investors.  The rule you are facing is a "conventional" rule.  Meaning that a conventional loan (loans governed by Fannie Mae and Freddie Mac) will allow you to buy an investment property at 15% down but you have to have 25% in equity to refinance.  All you need to do is find a portfolio loan that will loan higher and you will be good.  Portfolio loans are loans that come from the bank itself - outside of Fannie Mae or Freddie Mac.  Honestly, most portfolio loans will only lend 80% but since each portfolio loan is based on the bank itself it could be possible to find a portfolio lender with 85% Loan to Value.  Keep in mind the portfolio loan will carry a significantly higher rate, or could be an Adjustable Rate Mortgage, or be amortized over 15 years or 20 years, etc.  Hope this helps but if you have any other questions feel free to private message me.  

@Eduardo Lopez if you have a contractor that can tour a house with you that would be helpful.  Also, I have seen investor groups take tours of houses before.  It might be a good idea to see if there are any local investor groups in your area.  

@Account Closed you only pay for taxes when you start owning the home.  The seller will be paying for 2016 taxes for Texas property taxes and you will be responsible to start paying when you take possession.

@Adam M. my market would not support a closing that far in advance.  Here we would get many other buyers who would be willing to close with the tenants in place.  The more common structure would be to buy as is, take over the lease, have the security deposit be a part of the transaction, inspection and appraisal of home would be as normal.  And then to renovate after tenants leave.  Each market is different of course but that is the common structuring here.

@Aman S. there are lots of great contractors and realtors out there.  Finishing Touches is one I would recommend.  They are very responsive and have done good work in the past.  Have you gone to any investor meetings in your area?  Searching for that may lead to other good relationships that you can count in your network.  Good luck!

@Charlie Nghiem the population of Texas has doubled in the past 40 years.  90% of that growth has happened within 50 miles of I-35.  Killeen is in that threshold. Nothing is every guaranteed but Texas is a very fotunate market.  If you find a property where your numbers work here then use it.  There have been many a successful investor that has started out with a smaller property value and gone on to make it big.  I like how you want to get some local advice.  Stick to the numbers that make a successful transaction and if the numbers work then it will work out for you.  Good luck!

@Gregor Vidmar to have the mortgage in the LLC name means you would have to go through a portfolio lending product. A portfolio product is a loan type where the banks controls the money. Essentially it is their money. In contrast, a conventional loan is governed by Fannie Mae or Freddie Mac (if you have heard of those entities before). The rates on conventional loans are lower, more stable, and less risky for the bank to write. But they are also more strict to qualify. So on a conventional loan a private person has to hold the mortgage (and not a business entity). When you go to the portfolio route the loan options vary greatly depending on the bank, since it is the bank who controls that money. So some banks will only amortize over a 20 year period. While another bank may only offer an Adjustable Rate Mortgage. But the important item is that they can accomplish your goal of having the mortgage in the LLC name. Just look for a lender who has portfolio options and you should be fine. Oh, and all of the above is concerning 1-4 unit homes. If you are doing higher than that this description will be different. I have one follow up question: Why do you want to start building credit in the LLC name? Is it so the business can borrow later without you personally guaranteeing the loan?

Housing shortages will sometimes lead to increased rent prices.  What do you think about these 10 markets?  Sold Out: These 10 U.S. Cities Have the Biggest Housing Shortages