All Forum Posts by: Albert Bui

 HI Tecsia,

Your scenario is different than the OP above.

You own your property in a S-Corporation and ownership by a corporation is viewed differently by the agencies (FHA/Ginnae Mae/FAnnie/freddie/conventional financing).

It’s viewed as separate ownership and I’ve done a few of these purchases whereby the property is purchased from the borrowers wholly owned S-corp as a primary or investment property.

This can be done when the property is held by a corporation (S or C subchapter) but has not been as successful when it was held by a partnership/LLC/or LLP in my experience. Im always up to test the forefronts of lenders interpretation so if you have further questions feel free to DM me directly.

Hope that helped.

@Matthew Kwan

@Carlos Valencia

 Yes Richard It is possible

 Hey Jillian,

It just depends on your cost of capital and risk preferences typically commercial bank or local credit union commercial loans or investment loans have balloon features (are not 30 year fixed) and have typically higher rates than conventional financing (Fannie Freddie, not always but typically).

So you have to compare the pros and cons of cost, features, your intended use for the money and if it meets all your parameters then you execute your decision without looking back.

@Matthew Kwan

@Carlos Valencia

 Yes Mike I replied to

@Logan Turner it is not a problem doing a conventional Fannie or Freddie refinance from time under a LLC held vesting or title transferring to your personal name, the one nuanced point is that Freddie Mac requires you to be the 51% or more owner of the LLC to do this while Fannie does not (any ownership under Fannie still counts as long as you can prove you were manager/member).

Good luck on your refinance should you decide to proceed with it.

@Matthew Kwan

@Carlos Valencia

HI Logan since you're presumably the owner of this LLC 100% (or over 51% is the rule) your ownership in the LLC will trace over to your personal name so you dont have to wait another 12 months (yes now it is 12 months title seasoning when buying new to cash out refinance prior it was 6 months title seasoning, not anymore).

So basically as long as you can document you're the manager/member of your LLC the time held as a LLC is still going to count.

You will just qualify for the cash out refinance Fannie Mae like any other cash out refinance and at closing you'll close and QCD or quit claim deed it over from your LLC ownership to yourself as an individual at close.

Just be careful some states charge you transfer taxes even between yourself and your own entities, sometimes this is just the cost of doing business. We’re licensed in 12 states currently so we’re always having to be cognizant of the title transfer/deeding costs of these situations.

Best of luck and hopefully that addresses your question. 

@Matthew Kwan

@Carlos Valencia

 Every 2 years works of course, but perhaps You speed it up and do one every 6-12 months before you get serious or develop a family at which time it will be much tougher to keep moving so often. 

Most guidelines state minimum 1 year but in practice when these applications come in I've seen that 6-12 months with a reasonable explanation can be done easily.

Now some times in rare instances with exception I've seen buyers get approved even under 6 months. Some of these exceptions have been unsafe environment (article from borrower with shooting nearby, larger family size and need for more space from unexpected pregnancy, job relocation, and other.

So every 2 years is fine however dont let that 2 year figure hold you up because there is general guidelines then there is whats "really," happening out there with loan underwriters and what they'll actually approve.

@Matthew Kwan

@Carlos Valencia

Just careful on the 3-4 unit FHA properties that we'll be subject to self sufficiency rule however FHA is a good option to finance with on 1-2 unit owner occupied properties.

SS Rule is not easy to meet when dealing with expensive west and east coast or urban area 3-4 unit properties. However in the midwest it is typical to be able to "meet the self sufficiency rule for FHA."

@Matthew Kwan

@Carlos Valencia

Before you make a huge mistake you should assess where you're at and what skill set and personality temperament you have relative to task/goal at hand. Do you have the personality and free time to be able to fix and flip houses ? Its a lot more tedious that it seems or sounds. Perhaps you do have both or perhaps not.

 It probably took awhile to save up that 50,000 capital so Id use it wisely or you can do one of the lower risk strategies like house hack 2-4 unit while you're slowly learning and going to meetups and shaking hands and kissing babies. This is what I suggest for the average person with a full time job and limited time.

Of course you have to do all of the other personal finance stuff too like living below your means, reducing your means/expenses, and increasing your income with a HIS (high income skill).

If you are going to flip just make sure you have 6-12 months reserves to live on and to carry the monthly private or hard money payment while you're in the midst of your project so you're not left out high and dry.

Best,

@Matthew Kwan@Carlos Valencia

 Then Have someone else review your income can you qualify purely off your own employment income or do you need some rental income addition to help you qualify. This tells a lender well basically the borrower either has enough to qualify or not and if they need a coborrower or to use rental income or not. Its best to diagnose the situation first before prescribing a solution or remedy.

@Matthew Kwan

@Carlos Valencia