All Forum Posts by: Maron Faulkner

@Maron Faulkner I have had this issue with large institutions because I am started the self employed journey 2 years ago. However I have a fantastic relationship with a community bank and they lend based on the asset not necessarily my income etc. they do look at it but they mostly look at how that asset is going to preform. Little tip, use the BP Calculators for rental property and print out the nice report at the end to show your homework. Also talk yourself up and really know what you’re talking about (without lying) creat that nice relationship and the sky is the limit!!!

@Tyler Kortz

Ha ha I love it! That's great, I love the idea of developing a relationship with a smaller type bank. That's really smart, and great idea with the printout from the BP calculators. I've used them a lot and the graphs and so forth always look so sharp on my screen, but what a great move to take it to that next step and use them as a visual aid so people understand you're serious and know your stuff.

I'm following Maron.  Interested in the outcome of your post.  I'm looking for a re-fi of a property I have in Detroit.  I had two tenants and one of them just died a few weeks ago.  I'm ok on mtge. payment but not on two re-hab cards I used to make the property from a 3/1 into a 5/2.  I would be cash flowing with just the mortgage and other expenses but need to pay off the two cards that are costing me 700.00 per month.  The property has doubled in value but since I don't live in it, I can't get a heloc but would prefer a re-fi and pay off the cards without additional monthly costs.  Looking for creative ways to do it because I want to keep the property and If I flipped it I would have to pay capital gains on it.  My two year mark is next March.  

@Charlie DiLisio

Interesting stuff. I thought you could get a HELOC on a rental, but maybe not. I had a heck of a time when I applied for a basic HELOC on my primary house back when I bought my first rental - needed to get cash for the down payment. It was a huge hassle. A re-fi is supposed to be the key to everything, right? - but it's tricky with the monthly costs. And you're not the first person who has mentioned the two year mark. Does that mean things get easier when you've had the property for two years and have a that track record?

@Maron Faulkner Lot's of good conversation on the financing side here so not going there. In the off chance you are not leveraged into just a pension and maybe have a 401k/IRA of some kind, have you considered self-directed to provide for some acquisition capital, thus reducing financed portion. Will be some work with how to properly structure and allocate/disburse revenue's/profit's but it could change the math of it all.

@Maron Faulkner commercial loan should be an option - they usually don’t care as much about your personal situation and focus on the subject property. So that property will have to cover the mortgage payment after all expenses are accounted for. If it’s close, you may have to put more down as you suggested.

@Maron Faulkner ARM loans are not always easier to qualify for - they usually need you to qualify for the starting interest rate + 2%, or something similar. In other words, they want to know you'll still be able to make payments if the interest rate increases in the future.

Conventional lenders should be using 75% of the estimated rent, less the full monthly payment of the rental property you are purchasing.  If the number is positive, it's added to monthly income.  If it's negative, it's added to liabilities.  Other properties reported on the schedule E are calculated differently.  It sounds like you should get a second opinion from a different loan officer who is more familiar with financing investment properties.

@Stephanie Medellin

Thanks for the information. The loan officier said perhaps taking the rent of the new place into account was a possiblity, but only if there was at least a year's worth of rental history prior. Adding this kind of caveat to an already competitive, seller's market in Eastern Idaho - and everywhere - doesn't sound like a great idea to me. 

And yes, looking at another kind of loan may be what I have to do, not enough firepower (yet!) to qualify for the lower down payment and so forth. I understand that and think your idea of getting another opinion is great. In fact, as I mentioned to someone above, I already had a request into my previous lender. Thanks again.