All Forum Posts by: Brian Nordman

@Kevin Siedlecki - Okay that makes a lot of sense! So since you would be refinancing it makes sense to refinance to a conventional loan so you can get your FHA loan eligibility back for another property. Here's another question I have. If you are refinancing at that point which would be more beneficial? To keep the original term length of the loan so your payment would be essentially the same except the MIP would now be removed or should you refinance and start over on a 30 year term length to lower your Principal payment? Obviously, you would pay more interest over the life of the loan but it would increase your monthly cashflow. Any suggestions?

Hi everyone! I'm looking into doing a deal on a duplex in which I would live in and finance through an FHA loan. Obviously, I understand there is an upfront premium at closing as well as mortgage insurance premiums included in your mortgage payment when you put down less than 20%. My question is, I've heard that with FHA loans the MIP sticks with you throughout the entire life of the loan. I've also heard that once you reach 20% equity the MIP falls off. If it does indeed stick with you throughout the life of the loan, how difficult would it be to refinance once you've reached 20% equity to ensure you no longer have to pay the MIP?

Thanks!

Sorry to switch up this question a bit but I have an FHA related question as well! Is anyone that has had significant experience with FHA loans aware of any "hidden" restrictions that most new investors are not aware of? When I say "hidden" I mean more just restrictions that most people don't know about. I'm interested in doing a house hack on a duplex with an FHA loan as well and just want to be aware of everything involved with doing that so I'm more prepared. Thanks!

Bryan Hancock the original question was very much directed at determining which would result in the greater tax payments. So the options and different results were simply laid out for the poster. I understand that cash is king and a dollar now is worth more than a dollar in the future. Thats why tax planning is a very important function. Determining when to save is just as important. Such as when your tax rate will be higher and when you will be having more taxable income. It all needs to be taken into consideration. I mean why do you think companies pay so much for professions to do their tax planning for them?

Nicole B. From what I've read by taking a general contractor with you on a walk through they should be able to give the best estimate on repairs. If you planned to do the Reno yourself you could take measurements of the floors and wall space to help price out a lot of the materials. It would be time consuming but I assume a GC could give you the quickest answer

Kristopher Hanks wow so watch out for shady sellers? Haha in all seriousness thank you for that information. I'll be sure to focus on those things when I do a walk through.

@Kristopher Hanks that makes a lot of sense and is very smart to do that I think I will also include those clauses. What tend to be some of the biggest issues, whether in cost or just all around hassle, that we should be wanting our inspectors to be keeping an eye out for?

Thank you @Patti Robertson, @Kenneth Garrett, and @Matt Schelberg for all of that information. That will all definitely help in the coming months as I get closer to getting a deal done. I think I'm willing to leave it to the pros for my first couple deals to make sure I'm not missing anything and end up shooting myself in the foot.

Thanks again everyone!

@Dave Toelkes

My apologies! I was just trying to better understand the question.

@Dave Toelkes

Yes I do understand that. That only comes to play though if the property were to be sold before if has been fully depreciated. Regardless of what depreciation method is used, if it is fully depreciated the same total amount at the end has been depreciated. So yes, If you have intentions of selling the property within 5-10 years of purchasing I would recommend depreciating in the same method as the IRS. But if the plan is to hold onto this property for long term and fully depreciate it then the choice of depreciation method should be made based off of whether your income or tax bracket rate is expected to change in the future or not.