All Forum Posts by: Manish Shah

Please let me know if anybody has references to obtain a loan for non-warrantable condo. I have a option to get at 5.25% as LOC (fixed). So looking for a better option. Have 800+ credit score and flexible on down payment requirement.

Condo is non-warrantable because it has 52.5% investor occupied properties.

I think now the issues is should I even invest in a community like this with restrictions. The prices are always going to be depressed here due high number of investment properties. I might go ahead with this one anyway but I was closing on another property for which I still have time to get out.

Other optio is looking for a LOC after 6 months of renting it out. That probably wont get sold to Fannie Mae.

yes as I am doing a cash out deal, there is not option to back out. Option I have is use HELOC for now and then start looking to flip the property in few years. As long as HELOC is good rate, I am ok.

Just reaching out to the experts in the community for some advice.

I am closing on a condo with a cash deal and wanted to get the cash out. I started the cash out process while the closing prep was going on. Title search is done/appraisal is done and now I got a call from the broker that he just received the letter from the condo saying 86% of the apartments are investment properties and the underwriters may back out of the deal as they can not sell the mortgage to Fannie May.

Could you let me know what I could do in this situation? My options are

1. look for another lender - this might come with additional cost

2. pay through HELOC but this means I wont be able to clear the HELOC for the next deal

I know there are quite a few posts about pros and cons of doing this but just in case I want to transfer the properties to a LLC, what is the process and cost? Is it expensive? Is it considered as a sale?

One more question about buying property in HELOC/cash and getting cash out afterwards. In NJ, the title insurance and other costs associated with it are regulated (about $1400). If I am financing the property cash with the intention to pursue cash out later, I end up ordering the title twice. I spoke to somebody who advised I can delay the issuance of title insurance by a month if I plan to cash out within a month and I don't have to do this twice. If I plan to cash out in 6 months (that's what I am looking at now), then I will have no other choice but take title insurance twice. Any ideas/suggestions?

Thanks Chris, Rosston and Lance.

Lance that was a great tip. Found this article which explained the concept you mentioned. I think it will allow me to borrow money at cheaper rate and save a lot of lending charges, specially when Financing for smaller properties (where fixed cost is big portion of debt)

http://www.bankrate.com/finance/real-estate/using-...

I will get a good CPA for sure.

I read many places about investors using HELOC on primary residency to buy investment property. Here is my question. The interest on investment loan is a valid expense that you can take out from your income for tax purpose.

When you use the funds from HELOC, how will you get this tax benefit? HELOC interest in normally tax deductible but there are many limitations when you have high level of income and the tax benefit get reduced. (for example - if you have itemized deduction of say 30,000, you may be allowed to take only 25,000).

Has anybody experience this issue and is there a solution for this problem? Is it possible to pass the entire interest as a valid investment expense?

Sam,

I thought about transferring the property to LLC but my broker warned that the lender might recall the debt (as its commercial entity and their risk goes up). I liked your idea of master lease but just wondering if the HOA and insurance will still bill to the owner and not LLC. So the management of taxes/expenses will be split between owner and LLC.