All Forum Posts by: Blaine Johnson

Quote from @Account Closed:

Quote from @Blaine Johnson:

Quote from @George Randall:

You say re-purchase so I'm assuming this home has not been inherited. But if it has been, Freddie Mac does not have seasoning on cash-out refi if the home is inherited...

Cash-out Refinance - Freddie Mac Single-Family

It is an inheritance, solely to my wife.

It isn't clear if it has it been probated? Just because there is only one known heir doesn't mean there aren't other unknown heirs, (as unlikely as it may seem), creditors and taxes. As far as title is concerned, lenders like proof of a clear chain of title and probate provides for that. 

If title is still in her father's name, it likely hasn't been probated yet and you will need a court order to do that. It is more than just paying off the debt you have to be concerned about. 

If it was in a trust, that would be different matter altogether.

It has not been probated and is not in a trust. We have to move quickly to stop the reverse mortgage from foreclosing on the property, losing it altogether. Arizona allows up to 3 years to file probate, but we are working on hiring a lawyer.

Quote from @George Randall:

You say re-purchase so I'm assuming this home has not been inherited. But if it has been, Freddie Mac does not have seasoning on cash-out refi if the home is inherited...

Cash-out Refinance - Freddie Mac Single-Family

It is an inheritance, solely to my wife.

Quote from @Dennis Muno:

Quote from @Blaine Johnson:

We have the opportunity to re-purchase my wife's family home in Phoenix. All we have to do is refi/pay off the existing reverse mortgage which then transfers the property to us. We are going to cover this debt one hundred present by renting the property for the foreseeable future, and already have tenants in place. The issue we are running into is this; Every lender we have talked to wants to treat this as a conventional purchase with the loan request being the full purchase price, after saying they are not "conventional". They only want to lend their favorite percentage of our required need. No one is actually taking into account the full value and instant equity of the property vs. the payoff needs, and the fact that the note will be well covered by the rents. Truly a DSCR. We are requesting less than 60% of the market value of the home (440-450k +/-) and it will cash-flow nicely with a reasonable loan.

So here is my offer to any lender willing to take virtually NO risk;
We require a simple note of $250,000 @ 7.5% apr, 30 year amortization with no prepay allowed until 36 months minimum payments made.

This home will currently be our 6th door (and already under our management) across three properties. We are experienced investors and landlords. We just do not have the 50k cash-on-hand or usable equity in our other properties at this time to make this happen quickly.

 Blaine,

Is there a reason lenders tell you regarding why they only want to give you a certain amount of money or treating it as a conventional purchase?

No reason other than policy. I have been told multiple times that we must have more personal money as if a down payment.

The home is titled to my deceased father-in-law and there is a reverse mortgage in his name. My wife is an only child and the sole heir to the estate.

Private/hard money lenders are all I have talked with. Not one will lend more than 60% of the 250 needed. Treating that as the property value.

We have the opportunity to re-purchase my wife's family home in Phoenix. All we have to do is refi/pay off the existing reverse mortgage which then transfers the property to us. We are going to cover this debt one hundred present by renting the property for the foreseeable future, and already have tenants in place. The issue we are running into is this; Every lender we have talked to wants to treat this as a conventional purchase with the loan request being the full purchase price, after saying they are not "conventional". They only want to lend their favorite percentage of our required need. No one is actually taking into account the full value and instant equity of the property vs. the payoff needs, and the fact that the note will be well covered by the rents. Truly a DSCR. We are requesting less than 60% of the market value of the home (440-450k +/-) and it will cash-flow nicely with a reasonable loan.

So here is my offer to any lender willing to take virtually NO risk;
We require a simple note of $250,000 @ 7.5% apr, 30 year amortization with no prepay allowed until 36 months minimum payments made.

This home will currently be our 6th door (and already under our management) across three properties. We are experienced investors and landlords. We just do not have the 50k cash-on-hand or usable equity in our other properties at this time to make this happen quickly.

Originally posted by @Cameron Riley:

@Adam Martin

My

Qualifications are simple

No violent felonies

Good landlord references

And must have a section 8 voucher

I have little to no issue with non-violent/endangerment felonies.

However, there are many of those that I would be wary of;

Fraud, embezzlement, identity theft, etc. What were the circumstances, and what has changed

besides being on parole (not necessarily a deal breaker)

And, is misdemeanor domestic battery OK? Animal Abuse?

References?; Lived in (grandmas) "2 bed 2 bath luxury flat" (basement) for last 3 years and has impeccable reference and "rent history"? People lie, and lie for others, including the system (by omission due to confidentiality laws).

"Section 8" does have some good people. My best overall, and longest term tenant was section 8. They are a family friend to this day although not a tenant. I have also had my worst tenants through the system too. I am owed thousands that I will never get despite system guaranties and judgements.

I am tired of going to court. I now do full criminal and financial background, period. The application fee is the first test of ability to pay and take responsibility. It is the only way to assess my risk.

@Johann Jells

Same goes in Idaho. If they give notice beyond the first of a given month, they are responsible for the FOLLOWING month. The same is true for rent increases on my part. 30 days ahead of the intended month is required for ANY lease changes. Month to month is still a lease/rent agreement.

I remember when this exact conversation religiously used 2%?

Anyone buying under that was considered a fool...

There are no rules.

Just use some common sense with what you want. If the numbers satisfy you, do it.

I don't know how much enjoyment I'll get out of it, probably very little. Keep in mind that those 400 to 500 dollar rents that you're talking about are mostly free and clear, or owner-occupied properties that are augmenting the mortgage payment, they are not making any money. Check their market value/purchase cost against those rents. They are no better than this deal that I have found yet. The fact is, I got the h#ll out of P because of it's perpetual stagnation in all aspects. The powers that be there think that a new big box store is an economic boom, while a million square feet of commercial/industrial space goes unused. I really should just stay away.