All Forum Posts by: Jeff Grove

No...townhomes are still PUD's, but are treated more like single family homes in this regard. There is no complex approval process that needs to be done with townhomes (or villas). Just be careful of how realtors categorize these in listings...there are many that confuse the two. To be absolutely certain of the property type, look up the property on the city/county property appraiser's website. It will tell you everything you need to know...

Actually, I have a way we can all get a feel for neighborhoods or parts of a metro area that might better than others...In the Tampa market, this is a pretty good representation. I'm constantly looking at low/moderate census tracts because working for a bank, we earn CRA credit when people purchase in these areas. The link below will show you a map of the US. You can zoom in to whatever area you want to look at. Basically, anything in dark purple are your lowest income areas. The light shade purple is a moderate income area. Anything that isn't purple is either 'middle' or 'upper' income areas. Perhaps you can use it as a tool to cross-reference any additional research you're doing...Let us know if this represents your area pretty well or not...

https://www.policymap.com/embedmap_dyn?lqid=59216

Hi @Johan Yang - @Michael P. is right... @Shaun Weekes nailed it. Also keep in mind, you have single entity ownership levels to consider as well. Below is a link that will take you to the actual guideline. Conventional guidelines deem condo projects ineligible if one person or entity owns a certain percentage of units in the complex. In general, it looks like this:

A project meets the definition of single-entity ownership when a single entity (the same individual, investor group, partnership, or corporation) owns more than the following total number of units in the project:

• projects with 5 to 20 units - 2 units
• projects with 21 or more units - 20%

https://www.fanniemae.com/content/guide/selling/b4...

Welcome, @Leah N.!

I'm in the Tampa area and I can tell you through running numbers on a bunch of deals in this market, there's generally a tougher rent to purchase price ratio to exploit here. I use that as an initial barometer to get a feel for a market. Thus, it has caused me to look outside of my market. In doing this, I have noticed there are some other markets that aren't as tight, perhaps allowing for better cash on cash returns. Areas such as Hampton, Va, metro Cleveland (I see you @James Wise), and Jacksonville all seem to have more inventory of residential properties, where you get a better 'rent bang for your purchase buck', so to speak. I figure some additional research in areas such as these will help mitigate some of the risk of investing out of town. My plan is to learn about these markets more closely and find the B-Class areas James mentions above to consider investing in. Although, perhaps anyone reading this thread with knowledge in these areas can provide a pointer or two on where to focus the search for these types of neighborhoods in those markets...

This may paste a little ugly, but here are the Fannie Mae guidelines on delayed financing...

Borrowers who purchased the subject property within the past six months (measured from the date on which the property was purchased to the disbursement date of the new mortgage loan) are eligible for a cash-out refinance if all of the following requirements are met.

Rick,

I think I can help clarify...to help get a better understanding of this, try looking up "delayed financing". After the housing crash, conventional guidelines wanted to prevent the practice of buying and immediately taking out all equity at a value much higher than what was paid for the property. However, it is understood that some people use cash in order to close quickly, but then want to access a loan similar to what they would have taken in the first place. This is where the term 'delayed financing' comes into play. Within the first 6 months of purchase, you can refinance a 1-4 unit rental up to 75% of the contract price. You'll have to provide a closing statement to verify the price, along with what the source of funds used for the purchase. Once the 6 months passes, you can then use the market value to do a cash-out refinance (up to 75% for a single unit, 70% for 2-4 unit). With regard to ARV, John is correct...conventional lenders don't really look at after repair value. They would want the work to be done and then have an appraiser confirm market value with comps. 

Perhaps a smaller bank/credit union may be able to work with you on this as a portfolio loan if your LTV is strong.

One other piece of info regarding rental income...if you need it to qualify for the loan, you'll get credit for 75% of the lease amount (so, $750 on a $1,000 lease). This accounts for vacancy. Once the property has financials on your Schedule E of your tax return, that will then be used as the basis for determining the income from that property. 

Hi Faysal - I was wondering about the down payment you initially mentioned. If you're seeking conventional financing on an investment property, it's typically 20% down on a single family, but 25% down on a multi. So, the revised number there looks correct. 

 Like you, I'm in the process of looking for my first deal. I highly recommend getting the pro upgrade for a month or two  at least and keep running and adjusting your numbers. Determine the return you want to see and play around with the purchase price and rents to see how things shake out. One thing I've learned is don't be afraid to start low on an offer. You never know someone's motivation to sell. One final thought...if you're thinking of self-managing a property 2 hours away, you should factor in mileage expenses on your vehicle. 

Good luck!

Hi @Samal Shepherd - Try reaching out to Kain Contracting. They are located in Temple Terrace and I know the owner personally. This sounds like it would be right up their alley and they're very close to your location. I know they have experience with the permitting process for a townhouse community in Hillsborough. 

Great thread on PR here...it just prompted me to sign up and join the discussion! I was recently out in the Isabela (northwestern) part of the island for a few days. I learned a little about Act 20/22, housing incentive act and the "opportunity zone" in which almost all of PR has been designated. All good things to familiarize yourself with if you're considering investing here. If there's one thing I've learned over the stock market and housing crashes in the US, it's to consider buying when others are fearful to do so. PR feels like this to me. All we hear about are the issues with the government and of course, the impact of Maria. However, I just saw first hand that a lot of the island is running normally. What we don't hear a lot about is how someone like John Paulson is betting billions on PR (just google it if you're interested). It really has so much going for it...US property rights, USD as currency, many on the island speak English, driving is the same and flights to get there are pretty easy. However, you're nestled between The Dominican and USVI and the beaches are absolutely beautiful. 

I agree with the gentleman above...the AirBNB/VRBO rentals are the way to go. I'm wondering if anyone has experience with the Rincon area? It feels like property isn't as pricey as SJ, but the tourism market, charm of the town and surfing draw to the area make it worth exploring further, with AirBNB type rentals in mind. I'm visiting the Rincon area in late April and would appreciate any insight or tips!