All Forum Posts by: Dan Desler

Hi guys

Does anyone know if there are rules as to whether you can assume an FHA loan and then immediately sell the property?

Thanks

Dan

Hi @Christopher Phillips, thanks for the repsonse, much appreciated. I was just in Garden City over New  Years, stayed at the Garden City Hotel, very nice. Was visiting friends in Merrick.

Thanks!

Hi All

I have a fairly unusual opportunity and was looking to get some thoughts from the community.

I am talking to the owner of a vacant (off-market) property about buying the property off of him. 

He has a balance on an FHA loan, and if he sold it is looking to just make back what he owes on the mortgage (which is below market value).

Obviously we could handle this as a conventional loan, but I understand that FHA loans are often assumable (he is going to find out if his is).

If I wanted to turn this place into a rental property I wouldn't be able to keep it as FHA, so my question is would it be possible for me to assume his FHA loan, and then refinance it to a new regular loan?

Are there are any rules about doing that, and would I be able to assume the loan and refinance without putting money down?

Thanks!

thanks Ed

HI All

Quick question, if I refinanced my personal home now and wanted to invest in a rental in a couple of months, would I cause any myself any problems with getting that conventional loan for the investment property?

Hi All

I am looking at getting started at investing in rental property this summer. I have only been in the USA for 4 years (emigrated from the UK), so I don't have too much capital or equity in my personal home, 401K or other investments  right now , but I want to find a way to get started in investing in real estate this year.

I have access to up to $70,000 from my family in the UK. My parents have liquid cash they'd be happy to give me to get started. I would eventually give this money back in 4-5 years, so it is not free money, or in real terms, a 'gift' . 

What I'm trying to get my head round is how I can use this cash for a down payment on an investment property.

My current outline of a plan is this:

1. Get the cash into my bank account
2. Let it season there for a couple months 
3. Use it for a down payment on a good cash flowing property
4. Find a deal that ensures the cash flows enough each year to eventually give back whatever I use in 4 years time
5. Give back the cash back in 4 years, after 4 years, the cash flow I am now making is mine to reinvest.

Now, the questions I have are:

• Am I right in thinking I would need to call this money a 'gift' and season it for a couple billing cycles? 
• Can a gift be used for an investment property? 
• Is there any issues if I eventually 'gift' this money back?
• Are there any other ways of doing this?

I hope this all makes sense. I am going to start talking to lenders, I know they are all different, but if anyone has been in a similar situation or has advice I'd greatly appreciate it!

Thanks!

Dan

Hi All

Thanks for all your responses

@Dave Toelkes to be clear, I only was subtracting Depreciation from NOI (along with interest on the loan) to figure out the taxable income (which I would then apply a tax rate to to figure the approximate tax paid and minus that from my cashflow.

My cashflow is my NOI minus mortgage (P&I), capex etc.

Good point about escrow, thanks for that.

I guess the reason why I'm interested in understanding this far down in the analysis is that I think its a good idea to know at the end of the year approximately what cash you made after all is said and done. For analysis I agree, I can figure out COC return, cap rate & cash flow before tax and see if its a good deal or not, but it seems worth thinking about where you're going to be post tax, so I can have an idea what will be there for reinvestment.

Thanks again

Dan

Hi Everybody 

My question is when analyzing a property should I consider income tax in my analysis or should I assume that the deductions will reduce my taxable income to where its pretty much evens out and not worry about it? 

I ask because most things I read don't go into that deep into after tax cash flow and I'm interested because to me what is left after you've paid tax is really what I've earned and can be used for investments, paying investors etc. 

Let me give an example:

Looking at a property with 

NOI - $14,230

Mortgage - $5,012

Capex & maintenance fund - $1943

Cash Flow Before Tax - $7275

Now if I take the taxable income (NOI minus interest on the loan and depreciation over 27.5 years) I now have a CF After tax of $5,387. There should be other deductions that reduce my taxable income but at a minimum I can work these out and have an idea that at a very least I will have $5,387,

I guess my question is, would it be worth figuring out taxable income and CFAT when doing initial analysis on properties or is it safe to just stick with CFBT? Am I making it too complicated?

Thanks!

Dan

Thanks a lot rob

Hi everyone Another question for you guys My lender told me that the down payment and closing costs have to be your own money they cannot be gifts. For the Down payment I was planning on using a loan from a family member. Would this be considered a gift if they gave me the lump sum and I was paying them back. How is it considered a private loan instead of a gift Thanks in advance for any input Cheers! Dan