All Forum Posts by: Account Closed

Interesting article thanks for sharing. It sounds like it might be a couple years yet for lenders to adopt the new scoring model; however, those changes will be welcome by borrowers and investors. I think this will greatly improve access to the credit markets and put more upward pressure on prices as the demand curve shifts to to the right from new entrants into the market.

Probably referring to cost basis as your depreciable basis is just your initial cost. There's no magic way to track expenses-- use excel. Start with your cost of the purchase and your first year placed into service work with a CPA to calculate what your annual depreciation should be. Track other cash expenses as you would a typical personal finance budget; Revenue minus Expenses.

Start with $10m as an aspirational goal and revise as needed : ) As i said, pure skill I don't think can get you there--so it doesn't seem necessary to define what that skill set looks like. It would take a bit of luck in addition to skill without a doubt.

Probably a remote possibility to build a $100m in a lifetime of real-estate unless you have a few stroke of luck moments. e.g. Sterling buys Clippers for $18m after successful RE investing in LA in the 80's and it's worth $2b 30 years later. You would have a better probability (still remote) accumulating that much wealth being a Stanford MBA and working in Silicon Valley or being a Harvard MBA working in PE or a hedge fund. That's my take on the odds without crunching any numbers-- perspectives may vary.

edit- 15 percent is a common profit margin for most custom home builders in my area using a cost plus contract to build.

15 percent is a common profit margin for a most custom home builders in my area using a cost plus contract to build. Budgets

Elizabeth C. -"Also each brokers office have their own rules. just as an fyi"

Learning the basic concepts and becoming familiar with DU underwriting with Fannie will help any investor when dealing with conforming products and national lenders. I use the selling guide on a regular basis to research current or prospective purchases.

It might be helpful in clarifying a few points that may contribute to your general misunderstanding. Unless you are a portfolio lender, all conforming loans are underwritten using desktop underwriter (DU) or desktop originator (DO). Banks use these engines to confirm eligibility for delivery to Fannie Mae using the underwriting guidelines outlined in the selling guide. With the exception of some overlays by a lender, there are few deviations from Fannie underwriting guidelines.

Sorry Shawn- it wasn't meant to be a personal attack. I see you are a loan officer so maybe I should have been a bit more delicate in my comment. The eligibility matrix shows various categories based on LTV and FICO. To say 6 months is not accurate- are we looking at the same matrix? If for instance, the borrower was going up to 45 percent DTI and they were between 680-700 FICO and >75LTV wouldn't the required reserves be 12 months PITI according to the matrix? Just pointing out a one size fits all answer probably wasn't appropriate to describe underwriting requirements without more details.

Someone should put a sticky thread to link to the Fannie Selling guide. This is the comprehensive guide to any and all underwriting guidelines for originators delivering to Fannie. Also, the "Fannie eligibility matrix" will outline how many months reserves you will need. To say 6 months PITI is required for investment doesn't consider any nuances like LTV and FICO; the Fannie matrix is your authority here.

Argus is the premiere software for commercial application in modeling rent rolls and building pro forma statements. Im not sure if it would be a good fit for residential or if you can scale back the features. Worth checking out-- they offer a free trial. -Mark