All Forum Posts by: Andrew Postell

@Becca Tew there's a few blanks in your description here but I think I have most of the general ideas.  If you are buying a rental property a bank may have an "overlay" - an extra rule that they add to be more conservative - for your loan type.  A conventional loan can use rental income on a property.  Even if you don't have history of rental income on your tax returns.  That rule is for a purchase.  If you buy this home with hard money and want to refinance out of the hard money then you will need an executed lease to refinance into a conventional loan.  The renter doesn't have to move in yet, just have an executed lease (meaning it needs to be signed and the security deposit is made into your account).  You will still need income, credit, and assets for a conventional loan though (and by income I mean a 2 year history of the field you are in).  So if that doesn't apply you should seek portfolio lending.  I have several portfolio loans that ignore income entirely.  One type just goes off the cash flow of the property. So portfolio loans are out there.  If you need more information just private message me but seek out a lender that knows investment property transactions, has portfolio loans, or conventional loans with no overlays...or at least the overlays that wouldn't disqualify you from rental income.  Hope this helps.

@Greg Rose the 7 actions steps sound right. As far as the LLC goes, what does it matter if you pay yourself a salary from the LLC? What purpose is it to you? Your LLC will go under your schedule C in your personal tax returns and be taxed in the normal fashion. Your property will likely be listed in your Schedule E and taxed in the normal fashion. If you pay yourself from your LLC then you'll generate a W2 or 1099....which means you just made an extra step in the process. It all gets taxed in the same manner. I would certainly consult a tax professional on this. Maybe you are thinking of taking withdrawals in a formal manner for business structuring purposes? I was assuming the "We" means your significant other but if it is a partner outside of marriage there could be some reasoning to have proper paperwork for it. Consult a tax professional specifically.

@Dorian Moore yes, you have the right to receive your appraisal.  Yes, you have the right to contest your appraisal formally.  And yes, you also have the right to fire this bank as they are obviously a sub-par lender.  Don't get caught up in being "right" here.  You learned that this bank is terrible and you didn't have to be in a loan for 30 years with them.  Count that as a blessing and go to someone else!

@Ted Win I will confer what @Russell Brazil stated. An FHA appraisal will be very specific on what needs to be repaired before closing on the transaction. On an FHA loan the appraisal acts as a level of protection similar to the inspection. If the appraisal comes back and it's not possible to address all of the repairs you are entitled to receive your earnest money back. You "lost" your money on the appraisal since you paid for it up front but hopefully it will tell you which direction to go.

@DAmien Fried help us out with describing what type of loan you are looking at.  Is it a commercial loan?  Hard Money Loan?  Is it for a Single Family Property?  Apartment complex? Any additional details you can provide will help us in our recommendations.  Thanks!

@Immanuel Sibero your question is a little outside of my scope of expertise.  I would suggest to ask it as a different topic under a different forum area to get better responses.  That way we aren't taking over Mr. Pascual's post here.

@David Pascual what you are describing is probably best suited for a business entity and a portfolio loan.  If you have a partner then forming a company is likely the best method of keeping the percentages of ownership open and easily trackable.  I would certainly suggest consulting an attorney for this type of question for the proper guidance.  From a lending perspective if there was a business entity it would be unlikely that a business would be able to support a 30 year note at the initial formation of the business.  So likely a person will have to use his/her personal credit and income to qualify for the mortgage even if using a portfolio loan.  A portfolio mortgage can keep the business on the mortgage at inception and on title at inception.  I would lean on that route over a conventional loan if you have a partner.  A portfolio loan will carry a higher rate but all parties will be protected in the most effective method.  Hope this helps.

@Luke G. it isn't possible to keep any difference on a conventional loan when you purchase. You will be approved for the purchase price or appraised value, whichever is lower. If you need that initial cash back right away, I would encourage you to just buy it all with hard money. For the delayed finance rule they will lend you 75% of the ARV or 100% of the purchase price + closing costs...again, which every is lower. So if you buy with cash at $400k, the home is worth $500k, then you can only get back $375K (+ closing costs). Keep those figures in mind when making your decision. Hope this helps!

@Immanuel Sibero you are correct. Once you deed it to the LLC, the LLC owns the property. The mortgage will still be under the individual's name until he/she refinances or pays the loan off. It will report on his/her credit, etc. Technically the customer pays the mortgage. But normally the bank won't question what name is on the check/money order/bank account deposit because they just want the money. So if you want to setup an automatic deduction from the LLC account to pay the mortgage you can do that. I have people who have others pay their mortgage for them. As a bank we don't care as long as we get the money. If the payment is late - then we care. As far as recording the mortgage, the portfolio loans can use a LLC for the mortgage. A conventional mortgage will not - it is a requirement by Fannie Mae/Freddie Mac that the mortgage is under a personal name. Since a portfolio loan is governed by the bank and not Fannie/Freddie it's up to the bank itself on how they would want to record it. I've seen it go either way with portfolio loans. Private message me with any other information you would need. Thanks!

@Jackilyn De Castro if you are using a realtor he/she will get a copy of your bylaws.  If you are using a lender, they will require it for review.  If you are not using either then make it part of your purchase contract stipulations and offer.