All Forum Posts by: Andy Collins

one of the problems you are going to find is the lender(s) will want you to have reserves, you can't take your cash position to $0,,but can it get in in 2 or 3 single families (with reserves left), yes if you find the right deals and go hard money then conventional financing

if you use a line of credit there will not be a "mortgage" on the house, which means they are a cash sale, which means you will be limted to a percentage of what you paid for the house to finance, since you are not 'refinancing",,,

If you borrow the money from someone else, and they put a lein on the property, do the proper paperwork etc, you then have a mortgage to refinance,,,unfortunately you can't do a hard money loan to yourself

one reason (so far) I have only done rentals is I can have someone "out" in 30 days (texas), however if I am owner financing I will have to foreclose on them, which takes longer and has cost associated with it.

I'm not totally against owner financing, I have thought if I find a less expensive (say arv of around $80k, most of my rentals are $110-$125k), I would try that or section 8,,, but no guts to 'pull the trigger" yet

andy

if you have a property that has very little owned on it, you can transfer to an LLC, and get a commercial loan on that property, which is NOT a mortgaged property in your name since its now in the name of the LLC,,,this helps if you owe very little or have a smaller property, but want to buy a more expensive one with one of your conforming properties.

6 months reserves for all rental properties (most banks say all mortgages but some will not make you have 6 on your primary), they will use 75% of lease amount if you don't have 2 years history on a particular property.,,,may pay 1/8-1/4 point more than on properties 1-4,,

I have one 'contractor' that is like this, I don't use him for major jobs, but if its remove wallpaper/texture wall, laying tile, installing a toilet, etc, I don't worry about it,,,

He approached me about re-roofing a house, that I wouldn't go along with. I want someone with insurance walking around on top of the house.

I won't let him touch electrical or moving a wall,

My problem is if I'm going to use a general contractor, I will also need to get an HVAC guy to look at that system, an electrician to look at that, I do use a seperate foundation guy, etc etc.

Find a GOOD inspector, the guy I use has been doing inspections for over 20 years, he is a licensed electrician, has experience in construction, HVAC, etc etc,,,

You will need all utilities turned on for the inspection,,,if you don't do that, you don't know what you could be missing

I use the same inspector every house, he knows what my interest is and has saved me a ton,,just what I do

before you make an offer, no, during your due diligance period, yes.

unless you are extremely experienced or a contractor yourself, spend $300 or so and see if they find anything you've overlooked,,,they can save you thousands,,the better shape you think the house is in, the more an inspector is needed,,,if I'm going to do foundation, major rehab, etc,,it might not make that big of a difference

I have one rental with a pool, I don't like the pool company I had used, and the pump was out, so I bought a pump online and called a plumber I use for small jobs,,,he doesn't speak english and I don't speak spanish.

I showed him what we needed to do to plumb the pump,,he started and I left,,when I got back later I noticed he had run the pipe differently than it was before, but everything worked fine.

A day or two later I was over trying to get the pool in better shape (since the pump was out a few days it had greened up),,when I went to clean the basket on the intake side of the pump, I realized the way he ran the plumbing, there was no way to get it out,,,he ran a line over the top,,you can open it, but no room to pull the basket out,,,so I just cleaned out the basket by hand and told the tenants that was how it was done,,,they didn't know the difference

go start talking to mortgage brokers/banks, but do NOT give them your social security number or your credit report will be hit, repeatedly by hard inquiries,,,,,tell them your situation, give them your FICO scores (you can get transunion and equifax from myfice.com),,,

they will have to run your credit themself, but don't let them do it till you are actually working on a deal and applying for credit,,numerous hard inquiries hurt your score

financing is the biggest headache I deal with,,most of the guidlines you are talking about aren't with the bank, but with Fannie,, some of the rules make no sense,, and one mystake can make it so that you can't go conventional, but there is always a portfolio loan from a bank (a loan they don't sell), but you won't lock in the rate for 30 years