All Forum Posts by: Dennis Morris

@Dennis Morris

My wife and I buy our properties in separate names to maximize the number of loans we can get (you can only have 10 loans with Fannie Mae in your own name).  Whenever you are going that route, they will obviously only look at income from the person on the loan, which can really complicate debt to income calculations.  I would think that if you are self-employed together that they would take 1/2 of that income as hers.  It's just sort of a "wouldn't that make sense" observation though.

We have had to deed properties back and forth to each other in the past to make those DTI ratios work out (which we later found out came with a tax consequence! Not Fun!)

Is the obvious question not: Why not just be on this first loan together?

If you are looking for a second opinion - our mortgage brokerage company is AWESOME!  We have bought over 25 properties through the same broker.  They have a generic sounding name, but they are "The Mortgage Firm". They have offices in Central Florida... I think Orlando, and I know in Lakeland.  They have always been great to work with and can probably answer your question specifically if you give them a call.

Sometimes it is hard to tell if the 'rule' you are running into is a mortgage company rule, or a Fannie Mae rule.  The former, you can maybe get around with a different lender; the latter probably not.  Also keep in mind you can look into a portfolio loan with a commercial lender in your area.  They don't sell their loans to Fannie Mae and so often have more flexibility in how they underwrite.

All the best!

Randy

The HELOC idea sounds good to me. I do think a house hack is still awesome even if you're not breaking even. If you can house hack and be out of pocket say 50% of what you would be if you weren't house hacking, you're still winning, and the person in the other unit is still buying you equity.

@Dennis Morris No one starting out should be using private money. In the real world (where I reside) you need to take your time. Buy a house, build equity, pull that equity at some point and buy your next property. Don’t sell, become the guy that people send money to every month. Don’t become the guy that sends “private” people your money at a higher rate than you can afford. Real estate will make you wealthy over time but it’s not a get quick rich game.

I buy single family houses and getting them at a discount is a great plan, always.  We also get capital gains tax benefits for remodeling our own residences and holding for two years.  You could do that, move to another primary residence in 2 years, and have a nice tax-free lump of cash.  Buy another fixer as a primary with a portion of that money, and a similar rental.  I like probate houses for a bunch of reasons, but they usually have the right things wrong with them, such as old smelly carpet, but good structural condition. I can improve landscaping, put in new flooring, paint and so forth using Home Depot and get it done over time.  Look at the houses in my bio.

Food for thought, the 5 unit and up space is difficult to get funding for.  I suggest you look up the 5 units in your area on the tax assessors/recorder's site, handwrite and mail those owners and ask to buy with seller financing.  I would offer 5% interest only payments with a small down payment.  See where that goes.