All Forum Posts by: Andy W.

After having a couple of different banks run the numbers, the best I can do is a cash out refinance on the two properties with the most equity.

This would allow me to pocket ~$45k and increase the combined payment by $136 per month. The loan rates would remain virtually unchanged.

Would that be enough cash out for you to consider the refinance?

Also, for anyone considering the same, the Fannie and Freddie LTV limits for cash-out refinancing are 70% for multi-units (2-4) and 75% for SFRs.

• http://www.freddiemac.com/singlefamily/factsheets/sell/ltv_tltv.htm
• https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf

Thanks for the feedback, everyone!

A couple of you mentioned the importance of not getting into negative cashflow on a particular property: while I don't expect to get into that situation, does it matter if a property is in negative cashflow if it allows me to purchase a new property, and the combined income from both properties has a positive cashflow overall?

I realize many people have their properties set up as a distinct/separate entities, LLCs, etc. For better or worse, I'm not in that position, but perhaps it's still a good idea to treat them as though they are?

Additionally, I'm reassured by those of you who suggest I can extract up to 80% equity as I'd read it was more likely to be 70%-75%, although that will likely differ based on property type.

Two of my properties hold approx. $75k each ($148k total) in equity. Both were purchased with a conventional mortgage (same lender) a little over two years ago and are privately-owned (no LLC).

I'd like to leverage as much of the equity as possible in order to buy a new property. Which method is preferable (assuming either is viable): refi/cash out or HELOC? Also is there a method of extracting the equity from both properties in a single transaction? Is that even advisable?

Thanks for your input,

Andy

I'm also investigating what it means to bring in an investment partner. Wondering if there's a way to structure it so that the partner receives an agreed upon ROI for a short-term investment, but isn't a co-signer on the loan. Not sure how an "investment" from a third party really differs from taking a cash withdrawal on a credit card from the bank's perspective though.

@Marc Caraballo yes, I'm working with a 75% non-occupied loan from a traditional financial institution. I mistakenly thought I could get an 80% loan, and the extra 5% + 6 months reserves are what I'm trying to cover.

@Jaysen Medhurst I asked a wholesale question about the same property in the wholesale forum as they're two different questions.

I have a signed purchase agreement for a two unit property (to close on or before 06/10/16). There's little if any instant equity, but it cashflows really well, so I'm reluctant to walk away, however I'm going to come up short at closing so exploring other options.

Because I've never investigated wholesaling a property (until now), nor was that my intent when I entered into the purchase agreement, I only signed it with my signature, and didn't include the words "or assigns." I'm guessing that makes this contract ineligible for wholesaling at this point?

I have a signed purchase agreement for a two unit property (to close on or before 06/10/16). Due to a miscommunication between my loan officer and I, and me not doing my homework properly, I'm going to come up $12k-$15k at closing. There's little if any instant equity, but it cashflows really well, so I'm reluctant to walk away.

Assuming I can find someone willing to make up the difference, what forms could that investment take in order to be acceptable as part of the down payment for a conventional investment loan?

Obviously a "gift isn't an option, so would I have to enter into a partnership or LLC with the investor?

I have two rental properties (1 single family + 1 two-unit), but this is the first year I've encountered tax season as an RPO. I have a CPA I intend to have file my taxes, but it sounds like they're not expecting me to just show up with a box of receipts. Apparently CPAs and bookkeepers are not the same thing. Lesson learned :)

I think I've done a pretty good job of keeping my books since acquiring the properties, but I made the mistake of recording expenses as a single entry each time I paid off my Lowe's card. Now I'm realizing that I'm going to have to itemize this huge stack of receipts to figure out which property each one pertains to.

I've read elsewhere that if supplies, e.g. light bulbs, paint, etc. are purchased for general use rather than for a specific property, then it's OK to split the expense between the properties. I was wondering if that was also true of equipment, e.g. painting supplies, ladders, etc?

I don't have an LLC yet, so I'll be reporting to the IRS on a 1040E(?) so if I don't allocate the expenses to one or more properties, I'm not sure where I'd put them.

Also, should I be recording the expense as net, or gross (including sales tax)?

Thanks!

TL/DR:

• Can/should I split expenses for equipment such as painting supplies, ladders, etc. between both of my properties. If not, how should I allocate?
• Should I record expenses as net or gross (including sales tax)

 That's great functionality, and having just checked out their demo reports I see that I'd also get employment and rental history verification thrown in for that price too. If they actually verified salary that would probably sway me. Definitely going to bookmark them.

Since my earlier posts, Cozy reached out and answered some questions I had. I feel reassured that they're a good option and I'm going to refer my applicants to them initially and see how it goes. I'll report back.

Thanks again to everyone for their responses in this thread, including the reps from Cozy and SmartMove.