All Forum Posts by: Ben Schembri
Ben Schembri has started 6 posts and replied 49 times.
Post: Best Investments During Covid-19
- Haiku, HI
- Posts 50
- Votes 19
@John Hesford b/c is just the asset class rating of apartment properties. class a is high end all the way down to class d that is in poor shape. class b and c is in the middle and more common than a and d
Post: Cash out refi to sit on cash?
- Haiku, HI
- Posts 50
- Votes 19
@Joe Splitrock
Curious why the mortgage interest wouldn’t be deductible? Say you own rental property free and clear, you have zero mortgage interest deduction.
Then take a cash out refi in property and now have mortgage interest to take a deduction? Am I missing something?
Post: Cash Out refi - then sell?
- Haiku, HI
- Posts 50
- Votes 19
Cash out refi has no impact on your tax liability upon sale.
Post: Does it hurt credit to constantly BRRRR?
- Haiku, HI
- Posts 50
- Votes 19
Originally posted by @Gordon Cuffe:
@Ross GleasonI was referring to conventional loans. Your calculations are incorrect when referring to underwriting a non owner loan. If lenders used your formula ,we would never get non owner financing. Here is a example. If a person has a gross income of 6k per month and his primary residence payment is 1800 per month. That is 30% housing dti. lets say he has a car payment and credit card payment at $400.0 per month then his total dti is 36%. That person wants to buy a rental house at 150k with a total piti payment of $900.0 per month and the house rents for $1200.0 per month. The lender will use 75% of the rental income as income towards the payment. 75% of 1200 is 900. The 900 per month offsets the additional 900 per month liability so he easily qualifies. If that person was purchasing a house with a 1200 per month payment that rents for 1200 per month then he would get hit with 300 per month in debts on top of the 2200 per month. His debt to income ratio would be 41%. A lender would probably approve that loan, but if he wanted to purchase a house with those same numbers again, they would probably decline it because his dti would go up to 46%. I've been working for a mortgage broker for a long time and that is how it always how it has been. I just cant believe that a person can get a FHA 30 yr fixed rate at 2.75% right now because of the drop in interest rates.
Still am pretty sure debt to income gets hurt from this example. Say my current monthly debt is 2k and my current monthly income is 5k, DTI=40%. Purchase the property from your example and now monthly debt increases to 2.9k and monthly income increases to 5.9k, new DTI=49%
I believe to do this strategy numerous times you would a.) need to get smoking deals or b.)have a high monthly income
Post: BRRRR Success AND Failure - Lessons Learned in 2019
- Haiku, HI
- Posts 50
- Votes 19
@Sean Sloop
1400 rent for the duplex with 45k into it? That is impressive, keep it up !!
Post: Does it hurt credit to constantly BRRRR?
- Haiku, HI
- Posts 50
- Votes 19
I like the strategy but it seems that DTI would get out of hand after a couple refis
Post: Is this the start of the recession
- Haiku, HI
- Posts 50
- Votes 19
@Matt Higgins
Just locked in a cash out refi today and was happy with the rate news!!
Post: BRRRR method: Does it decrease cash flow?
- Haiku, HI
- Posts 50
- Votes 19
Wouldn't it be pretty difficult to have sufficient DTI after multiple highly leveraged cash out refis?
Post: Tax Deeds for land
- Haiku, HI
- Posts 50
- Votes 19
@Jamal Bey do you use tax title before you list for sale or after it is under contract?
Post: tax deeds and quit claims
- Haiku, HI
- Posts 50
- Votes 19
@Nate Hananger would you start the tax title service immediately after purchasing the property if you plan to immediately resell or would you wait until you have it under contract?