All Forum Posts by: Jeremy Dockendorf

Quote from @Brandon Johnson:

Most second home lenders will require more than 10%. But have you tried using an FHA product? As long as it's titled in your name and meets a small set of criteria, a second home can be purchased with under 10%. This is how I bought my first rental property was using an FHA product. I'd start with your local, community bank. See what they would do. The best luck I've had is with banks who know me. Let me know who you find! :D

I appreciate the tip! My mortgage broker just mentioned to me yesterday that he's looking for an FHA product for me, so we'll see.

Quote from @John Underwood:

A nice dock with decent water depth. That is where people will spend a lot of their time.

I’m looking at a property on a chain of 14 lakes. There’s access to a ton of good water for boating/fishing/recreating, but it can be pretty green with algae around this part of the lake. Im concerned I could miss families that want a sandy beach and dock they can jump off. I could provide a small boat for extra $ and a means to explore more/nicer lake parts. Thoughts?

What do you consider must-have qualities/features for lakefront property? I am in Minnesota so it is extremely seasonal and trying to find the right cabin on the right lake is quite tough.

Hit me with it:  beach quality? weeds? water depth? level lot? Etc. 

Thanks!!

I am really struggling to find somebody that will do 10% down on a second home mortgage in Minnesota. Best I can find in the current market is 15%. Anybody have a lead on a lender licensed in Minnesota that will do this? 

thanks!

Thanks @Yeuri Rebolledo and @Bill B.. Great advice. 

So I haven't selected an agent yet for a SFH I'd like to sell soon. But I got to wondering a question maybe someone here with more experience can answer for me.

When a buyer gets an accepted offer that is contingent on selling their current house, does the seller typically still take competing offers in hopes of getting something better?

Your goals and story: Looking at purchasing a primary residence - not profit generating. We do not “need” to have this property, but would enjoy moving here if we can get it for the right price/payment. It’s a beautiful property my family would enjoy living at. 

Type of property: Single family home on 50 acres. This is a “horse property” with 4 large outbuildings (stable, riding arena, barns). House needs about $45k for a remodel for us to be comfortable with the move.

Location of property: Minnesota

Purpose of financing: Purchase

Type of financing sought: traditional mortgage - but seller has offered to finance up to 5 years. 

Current or prior ownership of real estate: only primary residence

Value of property at present and/or your offer price: $790k asking, I’m looking to buy for <$650k

Anticipated or actual appraisal issues: no

Down payment or equity: we could put up to approx. $120k, but would like to do $75k down and keep about $45k for remodel unless we can finance it

Source of down payment funds, if applicable: current home proceeds

Income Source: Salaried plus commissions/bonus - but both wife and I have to qualify with base pay only since we do not have two years at current employers.

FICO: Excellent

I think seller financing the whole thing is too risky to us (seller wants $100k down and balloon in 5 years). We have no problem qualifying for a mortgage. The challenges we face:

1. The price is too high for a conforming loan. 

2. For most banks the acreage is too much for a “standard” jumbo loan. 

3. We won’t have enough cash for 20% down. (Maybe closer to 10-15%)

4. Our DTI could be close to 35-40% depending on purchase price because about a third of our income is commission/bonus not counted by the banks yet.

The seller has had it listed for about a year. He is overpriced at $790k and it is a somewhat unique property for the area considering the indoor riding arena and other equine amenities. The property IS split into two parcels (37 acres with all the buildings and 13 acres of pasture). 

We have been talking to farm and rural property lenders. Typically they want 20% down to avoid PMI and have a rate around 5%. I'd love to hear what kind of ideas y'all have for the most optimal financing scenario!

@Pamela Morrison Thank you! I will definitely check them out. 

Originally posted by @Caleb Heimsoth:

Originally posted by @Jeremy Dockendorf:

Originally posted by @Caleb Heimsoth:

Originally posted by @Jeremy Dockendorf:

@Caleb Heimsoth @Dennis M.

Do you both say that because of the risk of the property value decreasing in 5 years to where I may not have enough equity to refi without paying down?

(*the seller is 77 years old and said he won’t finance for more than 5 years)

I am not against balloon payments but not for a primary residence.  You are trying to justify this property as an investment when it’s not, it’s a primary house.  You are buying it to indulge your wife’s horse, hobby.  That’s fine but this is not an investment.

You can see since it’s been on the market for a year when the balloon comes due you can only refinance as selling will likely tske to long.  I doubt you’ll have 700k to just write a check.

Nothing you say will chAnge my mind that seller financing here is a good idea.  Good luck.  

You sound a little adversarial. I have no intention of trying to convince you that seller financing is a good idea. I’m glad you’re telling me it’s a bad idea. That’s why I’m here. 

You’re half right - it’s not an investment, but maybe you’re misinterpreting my post. I don’t think I’m trying to justify it as an investment. Like I said, yes - it will be our primary residence, and yes - it is to indulge my wife’s hobby. This property will always be a liability, not an asset - and I’m ok with that. 

I’m just asking if anyone has creative ideas to help me figure out a way to finance the property and the remodel. It sounds like traditional lending might be my best option. 

I appreciate your input.

You’re right it did come across a little abrasive and that isn’t my main intention, so I apologize for that.

I guess my main point was you acknowledge it’s not an investment (that’s good, we agree there) but then where we disagree is youre trying to apply investment financing (like seller financing with balloon payments) to something you just said isn’t an investment.

Obviously you can do this if you want, but I think it’s a bad idea.  Just like I generally think getting a HeLoc on your house to invest is usually a bad idea, but people do that all the time too.  

 A fair assessment. Thanks again

Originally posted by @Caleb Heimsoth:

Originally posted by @Jeremy Dockendorf:

@Caleb Heimsoth @Dennis M.

Do you both say that because of the risk of the property value decreasing in 5 years to where I may not have enough equity to refi without paying down?

(*the seller is 77 years old and said he won’t finance for more than 5 years)

I am not against balloon payments but not for a primary residence.  You are trying to justify this property as an investment when it’s not, it’s a primary house.  You are buying it to indulge your wife’s horse, hobby.  That’s fine but this is not an investment.

You can see since it’s been on the market for a year when the balloon comes due you can only refinance as selling will likely tske to long.  I doubt you’ll have 700k to just write a check.

Nothing you say will chAnge my mind that seller financing here is a good idea.  Good luck.  

You sound a little adversarial. I have no intention of trying to convince you that seller financing is a good idea. I’m glad you’re telling me it’s a bad idea. That’s why I’m here. 

You’re half right - it’s not an investment, but maybe you’re misinterpreting my post. I don’t think I’m trying to justify it as an investment. Like I said, yes - it will be our primary residence, and yes - it is to indulge my wife’s hobby. This property will always be a liability, not an asset - and I’m ok with that. 

I’m just asking if anyone has creative ideas to help me figure out a way to finance the property and the remodel. It sounds like traditional lending might be my best option. 

I appreciate your input.