All Forum Posts by: Thom MacFarlane

If you haven't already done so, use your VA benefit to buy a home. You're eligibility allows you to finance a home with no down payment. With seller and/or lender participation you can get in with little to no closing costs. There's you're parlay into investment. After a year, rent it. Buy another using FHA or conventional financing.

A heating source is required for financing a home (conventional, VA, FHA). An a/c unit is not. Thus your looking at the next buyer's source of money to finance you need the heater. At your price range is a cooling unit even a necessity to sell?

What type of property are you looking to finance? Commercial and/or multifamily consisting of 5 or more units is one type of lender. Financing 1 to 4 units falls into residential lending. Each with it s own specific lending criteria.

Commercial & apartment lending rely on mostly on the property to service the mortgage deb and to determine the loan terms. Residential 1 to 4 units is relying on the borrower for repayment which entails ability to repay (income) and  willingness to repay (credit history).

In either of the above there is no specific lender that is "first & foremost above all others" unless you or the financed property don't fit into the conventional "bank quality" type of borrower or property. In the case of a non-conventional borrower or property, a "special" lender (hard money, portfolio or private lender) is needed which increases the rates and terms.

What type of investor loan are you looking for?

Congratulations. That is stepping it up for a first transaction. Crown Point is my favorite spot to start my bike. Always will be a demand in that area!

DVD -  Refinancing an rental property you can get a loan up to 75% of appraised value.  Anticipated rate would be between 5.25% & 5.75% for a 30 year fixed depending on points & fees. At a $550,000 valuation . loan of $42,5000, you  would  net less than $190,000 for for your intended multifamly purchase.  

In my opinion , a better bet would be to 1031 exchange your rental home . A Mira Mesa home, properly priced, should close inside of 60 days. 

@ Louis Van Der Westhuizen regarding “Your response also gives me hope, but I have a question. If I am holding the loan, and then transfer the property into the LLC but still hold the loan, then don't I lose the protection (anonymity) because the property is still in my personal name from a financial liability perspective? The corporate veil is not so much a veil at that point right?”

Sorry about tardy response – you would do the loan in individual(s) name (to get best terms) but would later put title in the name of the LLC. If someone runs a title search or looks up the property then they see the LLC which is your intent to be semi-anonymous. Delve a little further, like most pros would do, and we'd see the loan and individual's name and easily locate the underlying owner by seeing that loan history. However it is also easy in California to find the owner of an LLC , that hasn't been traced by having a loan in an individual name, since an LLC needs to filed in the state of California. The filer, signer of the LLC, is usually the president, General Partner or managing partner (all alt names for owner) and easy to find.

In my opinion, unless layering ownership with LLC owning an LLC, being anonymous is overrated. Its tax benefits and liability protection is priority 1 & 2.

Hi David

Capital Gains for an owner occupant is going to be Sales Price less (acquisition cost + capital improvements less sales cost). So perhaps your gain on sale will be less than $50,000.

Exempting the capital gain may be possible even if less than 2 years. You’d have to have a compelling reason. Check with the IRS and see if outgrowing a 1 bedroom condo with a new baby & other child can exempt the gain in less than 2 years if you need to move.

Keep the condo @danheuschle calculates as an investor knowing that there is vacancy & maintenance factors to hedge. As a bank quality lender, If qualifying you for your next home, we would hedge by using a vacancy/maintenance factor of 25% of gross rents. Thus:

$1600 gross rent less $400 (25% vacancy/maintenance) = $1200 net rent

$1200 less $1530 (piti) = -$330

Thus a bank lender would have your retained condo at a negative rent of (-$330) on your condo if converted to a rental. Even though your vacancy/maintenance expense may be significantly lower. 

Julie - you're in a good position in having a paying job and being able to qualify for a loan. Whether financing  a home or investment property the cost to get in is a lot less costly getting in if you occupy.  Possible to get into 1 to 4 unit properties with just 3 1/2%  down. 

If you purchasing 1-4 unit properties and you want a lender's best rate than you will need to finance in your names individually. Fannie Mae & Freddie Mac are promoters of home ownership and though they will finance up to 10 residential properties for an investor they WILL NOT finance LLCs. Thus you you need to get get financing in your name. You can transfer the property into your LLC after closing the loan without invoking the "due on sale" provided those signing the loan docs are the 100% owners on the LLC.

There are some individuals that will provide you with the earnest money to get the property under contract while you wholesale it here in SD depending on the scenario.  Feel free to PM me for a possible source for earnest money source (private) or long term financing (bank).